Power Lunch - Trump fires commissioner of labor statistics after weaker-than-expected jobs figures slam markets 8/1/25

Episode Date: August 1, 2025

Stocks tumbled on Friday to kick off August trading, as investors weighed stark signs of a weakening economy and President Trump’s modified tariff rates.President Trump later fired the Bureau of Labor Statistics commissioner, hours after the agency reported that job growth in the U.S. had slowed to a near-halt.We’ll tell you all you need to know. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Yes, we do. John, thank you very much. Growing geopolitical and certainty with Russia causing some market worries. Welcome to Power Lunch, everybody. I think. I'm Brian Sullivan. Trade jobs, big tech. They are all in focus today. The president resetting the trade war. Jobs data getting reset, some cases by historic proportions and AI continuing to dominate tech as tech continues to dominate the market. The indexes right now not looking great. As John showed you, they are down across the board. We are seeing the Dow down one and a half percent. The SEP 1.8 percent, but NASDAQ and the big tech, the big decliner, down 2.4%. First, by the way, 1% move for the S&P 500 in more than two years or first time in a month in more than two years. The entire month of July, we never had a more than 1% move up or down. First time that has happened since July of 2023. Well, guess what? First day of August, and we do have a 1%. move. There is a lot to do in a very busy hour, but let us begin with jobs. Not only do we get the Friday jobs number for the month out, but we also got major revisions lower. The May and June payroll numbers combined dropped by $258,000. March 2024 was the last revision of more than $100,000. The last time we saw back-to-back revisions of more than $100,000 was back in 2020. That, of course, when COVID hit. So what is the real state of the American economy and job market right now? Joining us now to talk about this and more is Joe LaVorna. He is counselor to Treasury Secretary Scott Besson,

and he joins us now from the White House. Joe, the jobs numbers, a little lower than the headline, but the attention is on the revisions. How do we explain those? The revisions, Brian, have actually been quite consistent the last few years where you've had this tendency, the numbers to change quite dramatically. That might reflect post-COVID response rates, which are a lot lower than where they were previously. The numbers certainly weren't what people wanted, but the good news in the report is the income proxy for where we are is still very solid. You're getting very solid. Income gains upwards of 5% when we look at the index of aggregate weekly payrolls. So that's the positive. There's no recession risk. And with the one big, beautiful bill,

having been completed and with numerous bilateral trade deals with some of our key trading partners done, the outlook is very bright. Let's talk about the revisions, though, again, because I need to understand what's going on, Joe, and this is not a blue or red, right or left, whatever thing, because as we tried to highlight just now, these revisions have been going on the last couple of years. We've seen numerous downward revisions over 75,000, numerous, by the way, both up and down, the last couple of years. So do we trust? You're a markets guy. Do we trust the jobs number? It seems like something is broken here. It does. And again, these responses are voluntary. And the numbers, the response rates have fallen. That's part of it. But what's really interesting. I don't have an

answer for you is that one of the revisions was substantial in state and local. And ostensibly, you'd have a good response rate for the government. Arguably, that'd be one of your best places to have a strong response rate. So I don't know the answer to that. There are other data that does suggest that the labor market clearly is actually quite healthy. When you look at things like jobless claims, we've got a very low layoff or firing rate. But yes, your point is well taken, and that's something perhaps the BLS is looking into. The naysayers out there, Joe, you know what they're going to look at, May in June and say, well, what happened in April? That was the tariff announcement. Tariffs are the reason that we're losing jobs or numbers are being revised.

down, is there dots to connect? No, I don't think so because, no, I'll tell you why. One GDP rebounded quite sharply in the quarter, Brian, and the thing is that labor market does not respond that quickly, and we just see the size of the revisions alone tells you've got to be very careful with the data. The good news, another good point I would make is that financial markets are forward-looking. I understand why the equity market is pulled back today. We've had an historic recovery off of those April lows.

an intram month. That pullback, which is relatively modest, although there was a historic recovery off of that drawdown, suggests that the second half and beyond looks good. But on the data integrity, this is one of these issues that market investors have grappled with for a long period of time. We look at things like the NFIB survey. There has been some improvement. There's increased expectations of increased hiring the next couple of months. So again, I think the slope definitely is pointing upward. Let's talk about trade. trade and tariffs. I know you're not the trade person, so to speak, Joe, but you certainly deal with a financial fallout from it. And here we had deals being made, optimism around China, all-time

highs for the majority of the stock market. Then we get the announcement last night, and Dow futures fall 2%. I thought we were done with the trade talk. Well, I think the market, you know, the market has had such a great move higher that people were, you know, I get a lot of street research, and I heard a lot of people telling me there was going to be a consolidation. The good news on the trade front is that we've made a lot of deals. Many people didn't think they would happen, that people were telling folks that would be much longer, and yet a lot of these deals have come together, and it's happened, Brian, without any inflation. PPI, CPI, import prices have shown very little of any inflation whatsoever,

and we're collecting upwards of $300 billion in tariff revenue. So, you know, the markets will move around. In general, they've been very euphoric, reflecting what they expect to see, is a second half economic boom. Now, you said the economy was pretty good. You referenced GDP. You talked about the NFIB, National Federation of Interventive Business data.

I know ADP, by the way, was a pretty decent, not great, but it wasn't like this, Joe. So then how do we square the calls to lower rates? Is the economy good enough, or we don't need rate cuts? I'd say a couple of things on the economy. If you look at the Fed's estimate of the neutral rate, the rate that doesn't either push the economy up

or push it down, The highest dot is still about 50 basis points lower than where rates are right now. The median is around 3%. So we're basically almost 150 basis points that they're about above where the median rate is for neutral. So by the Fed's own metric, policy is tight. But I describe the situation as follows. You've got a very solid foundation. You've got very good soil.

You've got very good seed. And you've got a great gardener in the president. But it also needs liquidity for it to grow. And rates are certainly restricted by the Fed's own metric. So I understand the president's frustrations. And my guess, Brian, is that the Fed had this data on Wednesday, as the president's been calling for, they would probably lower rates because right now the numbers, you know, would have validated a cut already. They're actually lower than where they were when the Fed cut rates in September.

All the job gains, not all, but most of the job gains, Joe, as you know, came from one group. That is health care. It's been the story of the last few years. It wasn't for health care. and in some respects, education wouldn't have hardly any job growth at all in the private sector across America. How do we get jobs growing across all sectors, not just health care, as we all age? Yeah, so in the first quarter, we had a 24% increase in capital spending and a solid gain of 5% in the second quarter. So right now we're on track for basically a 15-year high in terms of capital expenditures.

And Brian almost always CAP-X leads hiring. The fact is the economy had been slowing before President Trump took office, and the fact there has not been any firings is because people are optimistic that once the tax bill is done and the trade deals are accomplished, and we're at that point where most of it's done, the forward is going to show real acceleration. You cut hints of that in the GDP report, and my guess is you're going to see that going forward.

And when we look at the equity market, I should also add in this audience knows, If you look at things like credit spreads, there were many people who worried about tariffs and hiring were saying there was going to be a recession in April. The data clearly don't show that. In fact, on the credit side, things look pretty robust. The earnings in the S&P have been very strong for the quarter. I mean, there's a lot to be thankful for, but the good news, the best news is still ahead. Well, you were a market, Scott. You worked on desk for years. We always appreciate you coming on as a guest. So you're speaking now to your former colleagues. every trading desk in America is watching CNBC right now. What are your, do you have calming words for them? Well, I think Secretary Besson has been a very positive influence on the markets, and he shares President Trump's visions, and just trust us.

Things are moving in the right direction, and I think we'll look back a few quarters from now and say, those guys are right. Yeah, and we're still just a couple percent off all-time highs, but I think the Russia headlines, the trade headlines, obviously making everybody a little bit jumpy today. Understandable. Joe LaVorneau at the White House. Joe, thank you. Appreciate it. Thank you, Brian. All right. So let's get back down to the markets and your money because we've got, as you could see, a rare big down day happening. The S&P 500 on pace for its worst day in two months than

Azdak also getting decked down about two and a half percent. Now, as we just talked about, the jobs number getting the headlines, but it's really probably not the big reason. Stocks are down today. We can confidently say that because stock futures were lower before the jobs number came out. Stocks are likely down today for a few reasons. Number one, those new tariffs we talked about. Number two, Amazon earnings were good, but they weren't quite good enough, and that is a problem because the market is so heavily weighted to just a few big tech companies. In fact, here's an RBI for you.

Nine companies, nine companies are now half of the value of the NASDAQ 100, 90% equals 50%. And as your next guest points out, the S&P 500 has never, ever been more concentrated in one stock. Invitya is now about 8% of the entire S&P 500. Now, that's good when it's going up, but can also cause problems of its own. Let's talk more about it. Bring in our friend Peter Malook, he is president and CIO of creative planning. Peter, I'm sure you've been to Paris, right?

I've been a few times, yeah. Okay, so here's what I would say, and this is what I love about the stuff that you talk about and you post on X. If you, not you, but if our viewers and listeners are afraid of heights, I would argue that the Eiffel Tower is probably not the best tourist attraction for them. Just you're out there on the elevator, it's 150 years old, not the best thing. The stock market is kind of the same way. Is it not stocks go up, but they also go down. And if you can't stomach days like today, as you have said, maybe the stock market isn't for everybody.

That's right. You've got to just accept that days like today are the norm. They were at the dorm in June and July, as you pointed out. But they're the norm throughout history. This has happened hundreds and hundreds and hundreds of times. And so you've just got to kind of embrace it. And if you think about most of your viewers are buyers. I mean, you're buying over the long run.

You know, we work with very affluent clients, we work with people just getting going. And one thing the very, very affluent clients have in common is they're strategic. They're thinking about the very, very long run. What should they own for the long run and how do they accumulate positions there? It's the people that have less money, less experience that are more tactical that try to take all this information from today and go, well, maybe I'll make a move because of a new trend or something like that. Specicated investors understand this is a normal part of how it works. If we didn't have days like today, everyone would be in the market.

If everyone was in the market, returns would be half of what they are. Yeah, it's an excellent point. And this is one day thing, right? We're at all-time highs on big tech and the S&P 500. Going back, though, to April, you and I, you were all guest on this network many times. Thank you. You're posting because people were genuinely scared then. And that was a bigger lesson of, to your point, long-term, dare I say, creative planning.

You see what I did there, Peter? I like it, Brian. You want to, if your timeline is not tomorrow, buy low, because five years from now, the market is most likely going to be higher. That's right. I mean, the stock market is the only thing no one wants to buy when it's on sale. And I mean, like, look, it's not on sale now. This is like a market that's had an incredible year exceeding everyone's expectations in the U.S. And the returns have been double overseas, so dramatically exceeding everyone's expectations overseas. A breather is very healthy.

It wouldn't be surprising if we had much bigger drop than this from these levels, just because it's normal. Once a year, the average drawdown is 14%. We had the self-induced tariff drawdown, and it would be completely normal to have another one. It'll be also horrifying because it'll be 6,000, 7,000 points if it happens. But the odds it happens are pretty significant every single year. Because every year we tend to have a 10% or more drawdown in the S&P over a couple week period or a couple month period. Do we not? I mean, that's what we're trying to say. Not today.

We're not talking about today. This is sort of market wisdom from Peter Malook that when you look at a 20-year time horizon every year, you're probably going to have one, if not more, seven, 10, 15 percent declines. And that's why you need to have cash saved up for those days. Yeah, I mean, if you're, if a viewer of yours is 50, they can expect 30 corrections of an average drop of 14% over their life, probably 5 to 10 bare markets, a couple of which will see their portfolios cut in half. If you need money next year or three years from now, it shouldn't be in the market. If you're saving, you should celebrate these pullbacks. And if you don't need the money for five years, you should just shrug your shoulders and move on with your day because it's just generally irrelevant.

Now, do you worry to our point of the intro, Peter, that 8% of the S&P 500 is one company, InVD? Yeah, I think this is incredible. So a few years ago, there were no trillion-dollar companies, and now there are a bunch of them, and they're all part of the AI revolution. InVIDIA, 8% of the market, and then you combine it with Microsoft, Apple, Meta, Google. You really have a very, very large, unprecedented percentage of the market concentrated in a few companies. And here's what I think is different about today.

Envidia, you can own every single public-created security in all of China and about 10 other countries, or you can own Nvidia. Envidia's market cap is more than all of that put together. Amazon and Apple and Microsoft more than probably 30, 40 countries combined, Europe combined. I mean, the market cap of these companies is astronomical, staggering. It's hard to comprehend. But these have become their own economies. They are their own economies.

I would rather own Apple than Japan. I really would. I've used diversified. I've got all these different apps that they're getting a cut of and all the different things they get a piece of. You'd rather own one company, Apple, than any company in Japan, the world's fifth largest economy. I'd rather own Apple than all of the Japanese stocks, right? And so I think that some of these have become like countries. And I think rightfully so.

And these were the tech revolution, the Internet revolution. and here we are, and there's a new revolution. Historically, every revolution was a new set of companies, which is why you saw that now the revolution is the AI revolution. It's the same companies that this AI revolution. Peter, I said you got some big breaking news from D.C. Can I ask you, Peter, to sit tight, hold on. You might want to, I don't know, but I think you might want to comment to the news.

I'm here. You've not heard, but you're about to hear. Folks, let's go down in Washington, D.C., Megan Cassella, pretty big headline happening right now. Absolutely. Brian, we're just hearing from President Trump via Truth Social that he is firing the commissioner of labor statistics. He says effective immediately. This, of course, coming after the jobs report this morning, showed lower than expected job growth for the previous month, as well as major downward revisions for the past two. So the president focusing on that, those revisions in particular in this truth social post saying he's firing Dr. Erica McIntyre for the commissioner of labor statistics because she was a Biden appointee. She was appointed to her job in January 2024. He says, this is the same Bureau of Labor Statistics that overstated the jobs growth in March

2024 by approximately 818,000 and then again right before the 2024 presidential election. He says these were records. No one can be that wrong. We need accurate jobs numbers. Goes on to say, I have directed my team to fire this Biden political appointee immediately. She will be replaced with someone much more competent and qualified. important numbers like these must be fair and accurate. They can't be manipulated for political purposes.

He says much more about McIntyre for and about the revisions that we saw this morning, Brian. And towards the end of this very long post, he goes on to say, Jerome, quote, too late Powell should also be put out to pasture. So again, returning to those strong words for Jerome Powell here, Brian, but I want to emphasize a major, major move here by the president. Those jobs numbers that come out every month, yes, they are subject to revisions. These are larger than normal revisions that we saw this morning. That's part of what you've seen the market reacting to all day. But when it comes to government statistics and the jobs numbers in particular, the independence of these agencies and the accuracy of the numbers has always been paramount. So accusing these agencies of politically manipulating the numbers is a major step here. A little bit of background on McIntyre for yes, she was appointed to this position by President Biden in January 2024. but she's also a labor economist who served over 20 years in the federal government. She's held positions at the U.S. Census Bureau, the executive office of the president, and the Department of Treasury as well. So not someone who was just put in there at the end of Biden's term.

That was a stranger to government more than 20 years in government. Brian, now the president's saying he's firing her effective immediately. Wow, big news there. Out of the labor department, President Trump firing the person who effectively oversees the creation of the monthly jobs numbers. Megan, thank you very much. Peter Maluka, Creative Planning is still with us. Peter, you don't need to wait in a politics.

Don't worry, but it's probably, we're now politicizing the Fed. We're politicizing the jobs number. That's not a market confidence building headline. No, I don't think. I felt like I was watching, like, I'm being punked or in the onion, you know, parody satire video. I can't believe what I just saw. I mean, look, I'm not a fan of.

some government statistics. You just have to look historically at their inflation numbers or what they say health care inflation is. I'm not a fan of the way Fed handled COVID. I think it widened the gap between the rich and the poor and created a big asset bubble. But this is not healthy. We can't have a set of numbers come out and fire somebody that served under numerous administrations and various roles because you don't like the numbers. Plus, Trump wants Powell to cut rates. These are the kind of statistics that the market today is telling us, the bond market is saying, we went from a 30% chance pal is going to cut rate to more than 50%. That's why the stock market's reacting negatively. These things are intertwined. I mean, he's getting what he wants and he just, I, it's unbelievable.

Well, it is unbelievable. And you do actually, I hate to say it, but you kind of do want bad numbers because that would then press your case, your own case, to have the Federal Reserve lower rates. They're not going to lower rates if the economy is going gangbusters. And I get your point, Peter, trust me. I get your point about many of our viewers and listeners, I can tell you right now, because I talk to them. I see them in airports, I see them restaurants, I hear them on Twitter. They don't trust government numbers. Fine.

That's fine. And there's reason to not trust all of them through either just human error or things get adjusted, whatever. But politicizing stuff to this level creates a level of distress. trust, which I don't think is very healthy long term. No, I think it sends a bad message to the markets and to everybody. It doesn't matter what side of the aisle you're on. You just, you can't have an announcement you don't like and fire somebody the next day and say it was for reasons that have gone on for five or 10 years. That's obviously sends a chilling effect. Markets do not like chilling effects. They're not going to respond super favorably to this. I mean, to me, the big thing here is how

what you just said. These pieces go together. You cannot say the economy is absolutely amazing and Powell should cut rates. That's not how those two things go together. You cut rates when you need to stimulate the economy because it's not doing well. We get some numbers that actually feed into that, and now, you know, we're upset with the numbers. I think it would just play out. We'd see a rate cut towards the end of the year. We'd start to see the market respond favorably and everything would work out the way, you know, the way he wanted. And so I can't believe I saw that announcement in real time. Well, it's hard to know. I don't know, and it's unclear if she, if she has been fired or

she will be fired. Trump's tweet or social media post was that he's ordered his team to fire her. So I don't know what that means in the grand scheme. But you'd be probably, if you wanted to replace this person or any, by the way, any person of any political stripe, You might want to say what we just said at the top of the show to Joe LaVornier, which is for the last two and a half three years, there's been massive revisions on the jobs number both up and down. And the markets are like, well, what good is the jobs number if we revise it up this month and then revise it down the next month?

Maybe just say we need somebody that's better at their job or something, I don't know, and then move on. Politicizing it is then what creates that division and that distrust. stock markets are based on trust financial markets are based on trust and you know the stock market's a real-time voting voting machine right in general the market trusts the that the numbers are directionally correct that's why when we see job numbers get revised in the wrong direction for worse the market reacts negatively if it did not trust the government numbers at all it wouldn't react negatively right

And then the bond market adjusts. It's expected rate cut in the future because it's a voting machine saying we expect that this news is bad enough to feed other problems that will create a cut in the future. So, yeah, the numbers aren't perfect. I don't love all the numbers. I don't love all the decisions the Fed has made. Obviously, these are two different things. But generally, the information is directionally correct and useful, right? And so it's never going to be perfect, you know, day to day, which is why you have the revisions later.

No different than a private business. A private business releases guidance, then their numbers, then they're revised numbers. Peter Malook, Creative Planning, doing what we asked you to come on for, and so much more. Rolling with the breaking news, you've probably got about 100 people to call. Peter, we'll let you go. We've got Steve Leesman joining us now by phone. Steve, obviously, this morning you're on all day talking about the jobs numbers, the Federal Reserve, and now this bizarre firing or soon-to-be firing.

What do we know? Well, I have to just give you my reaction, Brian, which is it reminds me of that famous comment at the McCarthy hearings where you say, at long last, Senator, have you no decency? This is the most outrageous charge of politicization that I can remember. There is no context in which these numbers have been revised in a political context. These numbers are revised routinely. It's not that they can't be improved and should be improved, but the notion that they have been underreported or revised for political reasons,

there's no statistical evidence of that, and there is no proof of that, and it's simply untrue. And I think you're concerned that all of a sudden these numbers over time will become unreliable. You're right. They're unreliable on a one-month basis for a whole series of reasons regarding, Brian, the idea that the response to the surveys since the pandemic has gone down, markedly, and all of these revisions the president is talking about are situations where the agency is doing what it should do. It's telling the truth about what it knows about the data once it gets more data. They're revised one month. They revised a second time, and then they revised once a year.

And all of these revisions he's talking about are the results of chewing up the estimates to the actual data. There's no sense, no charge at all, no statistical at all evidence that these are Policized. Going to this idea, a lot of people are joining us right now because they hear this headline. The markets are down. They're tuning into CNBC for the first time, maybe in a while. So the jobs number, to your point, can be improved, right? I think there's a frustration.

It doesn't matter what your political stripe is, that the jobs number with these bigger visions can be modified, can be made better. We both, I think everybody would agree on that. Can you remember some kind of a political firing of a. a government data official at this level? I can't. Never. That's why I sort of reached back to that 1950s example, because when you go too far and your charges of politicization, it just becomes essentially indecent. There is no situation where, look, you can look at the numbers and you can figure out when they're revised, and you can also go back into the detail and figure out why there revised, Brian. It's very simple. The data is available for you to see. My concern now is that

the president wants to turn the BLS into Provda, right, that he would appoint somebody that would be politically aligned with him. Now, saying that, it is very difficult to fudge this data politically. It would take an absolute army and a massive conspiracy inside the BLS to politicize this data. I spent, I think it was three weeks understanding how this number is put together back when the late Jack Welsh accused the Obama administration of this. And it's very difficult to do it. You know what? So I was about just about to bring, and we got Amon Javers also. We're going to roll into this conversation.

Steve Don't go anywhere. Amon Javers in our D.C. Bureau. Bring him back in as well. People are just joining us. President Trump has already or is going to fire effectively the head of the person you've never heard of who runs the monthly job. numbers. Steve, you took the words out of my mouth. I think since the late Jack Welch sort of uttered those Chicago guys, sort of implying that the jobs number was manipulated, I think, gosh, we're going on like 15 years ago now, that this number, Steve, for some reason, has been politicized more than

others. Is that question for Aman? No, it's for you, because I cut you off rudely. It has been a matter of politicization. You have a lot of people who argued during the Biden administration, that for some reason, it never made any contend essentially that when the numbers came out at one level and then were subsequently revised downward, that that was politicized. Again, that made no sense because why would you ever come back and tell the truth if you're doing it for political reasons, and you have that kind of control over the data, which they don't? So, yeah, I think it was 2013, but I could be wrong about that when Jack made that charge, and unfortunately he was a great man, but not on that score.

Now, Amon Javers is with us as well. Steve, we just ask you to hang out unless you got, are you catching a train or a plane back? I don't know where you're going. I'm actually going to jump on camera. I just got back from where I was, so you might see me in a minute. Well, don't knock Amon off because he is on camera, but we have multiple cameras in D.C.

Amon, what do we know here? What are we still trying to learn? This is all happening literally real time. Yeah, so what we're going to have to figure out right now, Brian, is whether this firing has already happened, is about to happen, and what rights the BLS has, and this official, who I don't know, might have in terms of arguing back that she does not deserve to be fired for cause here, that there's no evidence that she's done something wrong. Presumably she would make that set of arguments. But I think the management question here, Brian, is more about, you know, what happens when you're running an organization and you shoot the messenger like this, right?

if you get bad news and you shoot the messenger, well, what you're going to assure over time is that you get more news that you like because people don't want to get shot when they bring you bad news. The problem is that that news might not be accurate. And you get less and less accurate information coming into you as a leader. We see this in autocratic regimes a lot. You know, Vladimir Putin found this very problem to a very different degree in the invasion of Ukraine, where he thought he was getting good information about how combat ready his military was because all of his military officials gave him good news all the time. And turned out his military wasn't really prepared for the task that he assigned it at all

because the officials were not able to give him the bad news about how bad things really were. So in any government position, when you're leading any kind of organization and you're not willing to get bad news and you shoot messengers, what you ensure is that over time you'll get a lot of good news, but you really won't be able to tell whether that good news is real or not. That's the problem from a management perspective here. Well, it is. I think people might argue, if I took the other side of that, that the jobs number political hasn't been good.

It doesn't matter if you're a Republican or a Democrat because the jobs numbers got revised down a ton under Biden as well. So if the numbers were politically motivated, they sure didn't do a very good job because those numbers got revised down, I think, a lot more than they got revised up in the final months and quarters of the Biden administration. And it's also not clear if the president fully understands the dynamic here, right? Which is that weaker job numbers actually push the Fed toward doing the thing that President Trump wants, which is to cut rates, right?

So the old bad news is good news situation for markets. Bad news is good news for Trump, too. What he wants is a world in which the Fed lowers rates. That's the outcome he's pushing for. He should be then looking at a weak jobs number and saying, well, okay, that's bad news, but at least I'm going to get what I want out of the Fed. In this case, what the president seems to want is two sort of, you know, things that are ultimately in conflict with one another. He wants, you know, bombshell terrific job numbers, and he wants the Fed to cut rates at the same time.

And those two things are incompatible, or at least historically have been incompatible. What he seems to be pushing for is a situation where he can tell the Fed what to do and he can tell the BLS what to do. and those things, you know, traditionally, you would argue those things don't make economic sense. No, they don't. And aim and sit tight. We're also, our colleague, Michelle Crusher-Gabrera, is here now. We're going to talk trade. We probably will talk trade, but I want to kind of reset if our audience is just joining us now.

What we're talking about, folks, and what just happened, there's a lot going on today. But what just happened is that the president on his social media platform has effectively said he's going to or has all. already, we're not sure, fired the person who heads up the number creation for the Bureau of Labor Statistics. You know, every month we have what we call the monthly jobs numbers, the payroll report. This morning, that number coming in very weak. And the previous two months, May and June, revised way down. Now, to what Aiman and I just talked about, to what Steve Leesman and I were just talking about, and more, numbers get revised all the time. Now, there is part of the social media post from President Donald Trump.

I was just informed that our country's jobs numbers, in quotes, are being produced by a Biden appointee, the Commissioner of Labor Statistics, who fake the jobs numbers before the election to try and boost commonplace chances of victory. By the way, no evidence that that is the case. Trump continues, we need accurate jobs numbers. I have directed my team to fire this Biden political. appointee immediately. She will be replaced with somebody much more competent and qualified. Important numbers like this must be fair and accurate. They can't be manipulated for political purposes, end quote. That is the... Okay, so, Amon, I understand now you're just getting confirmation from our colleagues. Has this termination occurred? Yeah, that's right. Some new reporting now

from Monica Alba at NBC. She says that an administration, official tells her that Dr. Erica McIntyrefer has been fired. So this is a done deal now. So to that question that we had of whether she has any legal or process rights here in this process, that's going to be the interesting one now, Brian, given that we're told now by NBC News this firing is official. We'll wait and see whether there's a lawsuit here, any attempt to resist this, or what the next steps are. But for now, she is out. And the question is, who in who is going to take this job now if the if the terms of the job have now become that if you bring the president news he doesn't like he fires you can you do that's not but that's not

what that's not what just but amen that's not what happened what okay I mean it's not he's saying the numbers are political I don't agree with them on that but he was saying the numbers are political not presumably he wouldn't say that if we like the numbers though what's that? Presumably he wouldn't make the argument that the numbers are political if you like the numbers. No, but they were revised down under Biden as well. So I don't want to speak for the president, but I think what Trump is saying, just based on what he wrote, I'm just reading back what he wrote, calls the job numbers fake,

says they were sort of changed ahead of the election. So he was not president when that occurred. I think he's just saying the numbers are overly politicized, not that he just didn't like them. I don't know. So I guess the question is who's going to take the job in this set of circumstances now. Do you bring in, you know, a political person who's aligned with the president who's going to do what the president wants? Or do you bring in somebody who's independent?

The presumption has always been that this is an independent person. Now they've been appointed by president, so you can't get away from that. But the idea here is that it's, you know, more or less politically hands off with these job numbers over the years. Now do we have a situation where you put in sort of an ideological figure, somebody who's a loyalist to the president, somebody who's not focused on the science and the data, but somebody who's focused on the politics of how is this number going to be read in this moment? Does this give the president what he wants? If I revise these down by X, am I going to hurt the president's reelection? That kind of thing. If that becomes part of this job,

the question is, does the data become useful for the president or for markets who have traditionally relied on that data to get a sense of where the economy is going. Well, Steve Leesman has found his way to a camera. So I don't know where he is, but he's on camera somewhere. Michelle Caruso-C-C-C-Gabrera, MCC, Global Enterprises, contributor and former colleague, also joining us on set. Michelle, we brought you to talk about trade and tariffs. But I'm glad I'm glad I have all these smart voices around me on a day like today.

I think to Amon's point, which is a good one, let's say a super pro-Trumper now is put in this new job. Why would we trust the jobs data on the other side? One million jobs created every month, right? Which we also know is not true. Why would we trust this data at all? Which is the issue, right, when we see the situation. What I would say is what we're lucky about is that we have markets. And markets are very difficult to manipulate at sizes like this, right?

So if it becomes clear to investors and to market participants that the data that comes out of the BLS is not to be trusted. Of you, the BLS is BS, then we're going to know it and they're going to ignore it, right? I mean, I think the market playing out in the last 24 hours has really been super important because we kind of thought, you know, to Joe, the question you asked Joe LaVorna, I kind of thought most of this tariff stuff was done. We were getting to the end. We still had China out there. I thought we were ignored to tail into the tariffs and now last night happened and now I don't know. And then we wake up and the futures are down sharply even before the job's number comes out. because of tariffs, right? The markets act as a restraint on the president. When has he pulled

back on anything? It's been because he hasn't liked what the markets were doing. When the markets got yippy back in April after Liberation Day, right? That's when he put in the 90-day pause. So we are very lucky that we have the markets to kind of guide us and also to guide him and to maybe constrain him at moments when his actions maybe are not achieving what he would like. But to Amon's point, Steve Leesman, we often, it's easy. to forget that one, I don't know if you ever heard of Jerome Powell, but he's the chairman of the Federal Reserve. And Jerome Powell was appointed by who? Donald Trump.

Donald Trump. And now Trump wants to remove him. So I'm not even sure it's who appoints somebody anymore. Well, I mean, look, there are structures set up in the government for a variety of reasons. And Michelle really hit it one of them. And sometimes you do it to create confidence in markets. You have an independent Federal Reserve and it underpins and has been a reason for the success of the greatest, most liquid markets in the history of humankind. We have never seen anything like the amount of debt, the importance of the debt, and the way that the debt is traded and is a benchmark for risk-free trade all over the world in the history of humankind. That's one.

Underpinning that, in addition, are the statistics that underpin the U.S. economy. We don't think much about it. It's like saying, hey, Brian, how's the plumbing in your house? We don't talk about that all that much unless, of course, you have a problem. And the statistics are part of the plumbing of the financial system in a way. It guides policy makers in terms of making the right policy. And it also tells us that what's happening underneath, and we can trust that data that it's not manipulated by the government. And that's a key important part. you know what, I just thought of this, Stephen, and then maybe Aiman, I'm sure, also knows. I don't know. It's not one of those questions we're actually knowing. I've no clue. How does the number, Steve, get put together? Would one person have the ability to mess with it? No, I don't think so, because my investigation of this several years ago is that there are a variety of offices all around the country. They feed into a variety of offices inside of Washington eventually, and it goes to. goes through multiple steps. And I believe that there are multiple steps along the way where

if you were to diverge from what that data has told you from the bottom up, that it would be very difficult to keep that secret. In fact, I remember joking at the time, if the government was that good that it could pull off a conspiracy that wide, we ought to be giving government more to do, not less. Steve, remind me, was it Alan Greenspan who wanted ADP to put out a weekly number because he didn't like the monthly jobs number. Not that this has been manipulated. I'm not suggesting that, but that there were better, more up-to-date ways to actually get the numbers. And yet, even as we get that ADP report, it doesn't move the market as nearly as much as the Bureau of Labor and Statistics.

It does move the market. It's a very good point, Michelle. I believe we're on the cusp of change here. There was recently a bipartisan letter written among economists from both sides of the aisle that were urging the BLS to look more closely at the private sector data. There are tremendous problems, Michelle, with using private sector data, the extent to which the data is a public good. And that's a word that I know, as all of a sudden made the hairs in the back of your neck to stand up because nobody knows more about that than you do. The notion of the government does provide this public good and whether or not it can

and or should rely upon the private sector to provide it. But all those antiquated notions come for a period before big data. Now there's big data. The government has been working on the idea of incorporating some of this big data. And I want to go back and just maybe tweak something that was said earlier. We found out somebody said that the jobs data is no good. Well, it's no good to make a trade on the jobs this month. Over a three-month period, they get pretty darn close.

And over a year period, they get closer. The jobless claims data looks to be pretty good in giving us a good idea of what's happening. So you incorporate all of this. But yes, Michelle, there are changes and advances the government should be making. It's been very slow about it because of its concern over this issue of what is a public good and what's a private good. It's just when you have revisions this big, Brian? I mean, those were huge. It tells you there's a problem with the process.

I know, but I think. And Amon, you can speak for yourself. I think to Amon's point, Michelle, and Amon jump in here. The idea is like, why would anybody take this job now and you're just going to get whacked if you bring somebody to a food they don't like? Yeah, I mean, that's the question. And then so what does that do to the data, right? If somebody does take the job under these conditions, can you look at that data and say that that data is not going to have some thumb on the scale? I want to go back.

And Michelle was just raising this idea of the revisions because I'm just watching some of the reaction here on social media. And a lot of people are upset because they're pointing to the revisions and they're saying, well, wait, how can this data be any good when they revise it? And they say later, well, we were wrong last month. The revisions are a rolling thing. The jobs number is calculated on an ongoing rolling basis, and they're constantly revising the previous months as they go along. That's because more data is coming in about what happened in that month, and they have a better fix on it as time goes on. So the revisions are an effort to be more accurate, not an effort to go back and somehow politically hide the ball on something that they didn't like. That's how these things have been calculated forever.

That is not a new phenomenon. Now, you might say the size of these revisions is surprising because we're, we might be seeing something in the market that's new here because these revisions are bigger in scale. My guess is that has more to do with the fact that this tariff world that we're in is relatively unprecedented. And the effect that that has on jobs in this country is relatively unprecedented. We've never seen something this sudden and this dramatic from Washington into the market. And so therefore, the effect is maybe bigger.

And so the revisions may be bigger. And so the revisions may be bigger. But the revisions themselves are not the spin on the ball. That is a part of the standard process that has been going on since day one with these jobs numbers. Brian, let's tee up the most ridiculous conspiracy of all time, okay? I got a few. It has nothing to do with the jobs numbers. I can assure you.

No, but let's do it. Let's do it. You have an election happening. I believe it was in November of 2024, right? So if you're trying to be political and help out the Democratic Party and you're a Democratic statistician, tell me what the sense is to release in August of 2024 the idea that payrolls were $818,000 lower than previously reported. Would we be just idiots for doing that?

The idiocy of the political conspiracy, it just defies the logic of even repeating it. I was going to use an expletive there, but it is really stupid. Well, listen, and to Amon's point, the one thing I love about social media is we do look at it. We're getting real time stuff. Half the people want me fired because I'm not taking, half the people want me promoted because we're not, we're trying to play this right down the middle. The reality is that it's kind of like the Federal Reserve, Amen. We're talking about Jay Powell. I've never met Jay Powell.

I don't have an opinion of Jay Powell, but I can accurately report that the president has said multiple times that he's thinking about. about firing him or maybe once him fired. I don't know anything about J-PAL, except I do know that when you have talk like that, it will, because I talk to market participants, it does cloud the market a bit. This is just kind of muddying the waters a little bit. Right. Or a lot of bit. I think what we're going to, I think what you'll see here with the market reaction is

whether the market values the BLS or not, right? I mean, to I think the point that Steve was making a short time ago, maybe you could have big data and all sorts of algorithmic determinations of jobs in the country, and that would be a more reliable process. This process was put in, you know, decades and decades ago in an effort to get the best data in a nonpartisan way with no spin on the ball about what's going on in the economy. You know, maybe the market says, well, we don't really need that information. We're fine without it, and so we don't care if it becomes politicized and if presidents in the future put in people who will just give them numbers that they like or give them numbers that they say.

they are not political. So we'll see. The markets will look for other ways to find the answers to what they need to know, for sure. And by the way, I don't, and this is no knock on the BLS or the PhD. By the way, I just found out as a got a PhD from Virginia Tech, my alma mater. The market will figure it out to your point. And I don't know, they obviously, somebody believes, the president believes that this department, and she is the head of this group, could do a better.

job. I mean, at the heart of it, it's politicized. But I think, Michelle, if we had to back up and sort of take a motion out of it, the president believes, it's his belief, not our belief, that these markets and these numbers have been, or the numbers have been manipulated for political gain. Oh, yeah. I don't doubt that he thinks that. I mean, he's talked about. And based on my social media feed, there are other people who also believe that. Yeah. Brian, the question for that is, The question of that is, what is the evidence for that? What is the evidence? Yeah, I'm not, nobody's saying.

What is the evidence that these numbers have been manipulated for political reasons? You know, is there a whistleblower inside BLS who's revealing that, in fact, the data has been changed? Is there a document trail which shows numbers were one thing and then they were another thing? Is there somebody inside the White House who's been told by people inside BLS that, you know, we're going to do this to you because we don't like where you're going? the president's not presenting any evidence here. He's just asserting that there's been a political effort here on the part of BLS. And I have not seen any evidence.

I mean, again, I'm not defending what he did at all. I don't know the person. He is the president of the United States. I don't even know, Steve, what the authority chain would be inside the labor department coming. I don't think we've ever seen from the White House, at least not maybe back in like Harding's days or something, that there was some kind of. from 1,600 Pennsylvania Avenue down to whatever street the Labor Department might be on. I mean, this is kind of an unprecedented move for an official that, let's be clear,

99.999% of us could not have identified on the street. Yeah. I was sort of laughing a little bit when Amon asked what was an important question before, but now was a little bit quaint to ask, does the president have the time? power to actually fire this person. But that's a quaint question now, because it looks to me as if the courts have generally, the Supreme Court, has given the president basically unlimited authority to fire whoever he wants, except for perhaps at the Federal Reserve, but we're not 100% sure on that. So that would have been an important question before, I think, recent legal rulings from the Supreme Court. So I think he does have the power to fire him whether or not there's a power to

give a mandate? I mean, that's really what you're getting at. And Aiman was very eloquent about this. Like, how and why would you believe the numbers any longer? And I would just add one more thing, Brian. When something is apparently totally made up, there is no down the middle. There is no, I know you're trying to be down the middle, but this is all entirely made up. Let's play the other side, though. Okay. And I don't know any of the, no, no, and here's the other side. Because this idea, and this goes to your world. Steve, Michelle comment on this. Fed independence.

We know the president's got after Jerome Powell. And all of a sudden, people who've never talked about the Federal Reserve in their life are now, you know, other networks like, well, the Fed of the Fed Independence, right? Like, okay. Lyndon Johnson shoved William McChesney Martin, who was the then Federal Reserve Chairman, against the wall. And said, my boys are dying over there. Physically assaulted a man.

Okay. He was referring to Vietnam and he wanted lower rates. We know Nixon, browbeat. I think it was also Martin, his Federal Reserve Chairman, this idea of political independence in political appointed jobs is, in some ways, BS. It's difficult, but ultimately, let me go back to my original point.

You have the markets that are the arbiters, right? I believe that someone said to President Trump at some point when he was condemning Jerome Powell before today that if you keep doing this, Actually, long-term rates might go up because if it is perceived that you put someone in there who will not control inflation, then the markets, the bond market, will control inflation for you. Interest rates will go up. Now, today, because of the jobs numbers, we see interest rates going down due to fears of weakness in the economy. So maybe it gives him a little more room to talk about firing Jerome Powell because what he's done before.

Maybe, yeah, maybe now. Well, look what I did, Jerome Powell, I fired this person, you know, so. Dr. McKecker and whatever name is, Amy, Megan Casella, let's go back to Washington, D.C., Megan Cassell rejoining us, and she has more new information about this story. Megan. Brian, that's right. I was just inside trying to talk with officials about what led to this move. What's the current status of this official's hiring and firing?

I spoke with an administration official, so all of this comes from one administration official who told me the best way to describe this firing is in process as of this moment. If the official was not sure if it had already happened or if the paperwork was being filed now, the official also was not sure whether or not the commissioner was notified of her firing before the truth social post went out. So more questions to ask there. I asked what led to this decision. And the official told me there have been plenty of data points to show that the commissioner was pretty incompetent. That's a quote in the job. He said today's reassessment of previous numbers was pretty significant that there had been a pattern of incompetence. And the official told me

notably that this had been on the president's radar well before today. The official remembers the president bringing up this possibility of firing the commissioner months ago. So it's possible that this has been brewing for some months now, Brian. Now, I asked about potential for legal authority and whether the White House had been consulting with the office of the White House counsel on this. I was told the White House believes this is 100% within the president's authority. They said they're prepared for anything when I asked if they were prepared for a legal challenge, But they also cautioned that that was a hypothetical. I also pushed back to this official saying revisions are generally very normal.

They're very standard. And the official acknowledged that yes, they are normal, but under her tenure, they've been significantly way off. I was told there's always revisions. That's not an anomaly. But this is about the scale in which the revisions have had to be made. And then finally, Brian, I asked if there was a message from the White House for markets or investors who are spooked by this move or who might be wondering whether they can continue to be confident after this in the government data and the accuracy of the government data.

And the official told me the White House says they'll have someone in there who is competent and can do the job and won't embarrass themselves the way this other person did their job clearly showed that the analysis was way off. Brian, so just a little bit more color from the White House and sort of what brought us to this and clearly something that had been months,

I'm told in the making. Okay, good reporting there. Megan Gisela, Aymn Javis, some breaking news. You've been added to the closing bell. 302 is your tit. You're right at the top of the show. That email just came through. Just let you know that. Steve, Steve Leesman, back to you. So the president's team is saying, and they just told Megan Cassella, this person was just not good at their job. And that's why they got fired. Are these revisions lately? Have they been of size, magnitude, different than the revisions of a decade ago? I don't remember.

It is clear that since the pandemic, Brian, we have had a decline in the response rate to the jobs report, at least in the initial month. And that seems to be linked. It's correlated, not necessarily causation, with an increase in the total revisions. Let's just be clear here. What we're talking about is we're talking about firing an official because they're telling us. the truth, right? If the commissioner would have been smart. His take, again, I'm not just...

Let me finish. His take is the numbers are too far off. Well, if they wanted, if they were smart under the current logic of this administration and wanted to keep their job, they would not come back and tell the truth. That would be the way to job security would appear in the Trump administration. Because telling the truth and having large revisions based upon the initial data. Whether or not there should have been or could have been, or there are different ideas for how to get this more right at the beginning.

I think that's an excellent pursuit. I would look at that. I don't know that I would fire the BLS commissioner and say, this is the problem, this person is the problem, and politics are behind it. No, it's probably a problem of statistics and data gathering that needs to be looked at. And then if that ends up being a problem,

then I might fire the commissioner, but I certainly wouldn't go off ham-handed on a situation. when the numbers, his numbers, were revised downward. And then, Brian, you've been pointing to this issue, the next person, and what will that data, how much will the market believe in that data with a Trump appointee who has essentially been told not to tell the truth? Well, I think, I think, Amon to your, it kind of goes the point you were making, if the revisions, here's the, let's be honest, folks, okay?

Here's the issue with the story is that the firing of this mid-level economist that the BLS is coming from the White House. like her boss fired her quietly and replaced her as somebody else, even. This is a public firing from the president of the United States. That automatically politicizes it. Yeah, I mean, it's political by its very nature because of what the president says about it. And this isn't coming from the Secretary of Labor who says, you know, mechanically, we've looked at these things and we think these revisions are too high. Again, I go back to this point, Brian, that a lot of people in our audience, or at least on social media, are reacting because of the idea,

of revisions to them seem somehow corrupt or inaccurate or an indication of failure. The revisions are standard. They always revise the numbers a month or two after the fact. This data is gathered on a rolling basis and those revisions are put out in a regular way. Now, why are they bigger this year than they've been in the past or bigger than we've seen recently? I think part of that is because this tariff change that the president has put into the economy is having a big impact and it's difficult to calculated things are moving in real time. Steve also said it was an issue post-pandemic, right? The number of

respondents coming in is much smaller. So, you know, Steve, I think... So when huge things happen that affect the gathering of the data, you're going to see a huge impact in the data. But they could have. But maybe the BLS, again, I don't know, but it seems like Michelle, maybe the BLS could have adjusted for that. It's been five years now. Well, I think that's the

question. Whoever takes this job next, I think has to be very, very transparent and say, these were the revisions before. They were much larger. here's what happened when it comes to gathering the data that led to those revisions. And here's how we're going to improve data collection so that we don't have such enormous revisions. So these were big revisions. They do that, Michelle.

But Steve was also talking about enormous revisions. Got it. Yeah. Thank you. Amen, cut your mic. We're going to see at the top of closing bell. Amon Jabbers. We'll see him in a couple of minutes.

Cut the mic. Just be careful. Go ahead, Steve. Steve, sorry. Go ahead. Oh, no, I was just saying they do that. There are multiple papers out from the BLS about how they are always in the process of trying to improve the data. But Congress and the president might start with not whacking the statistical budgets out there and not doing what they did,

which is whacking many, many employees inside of these statistical commissions. Doesn't help. Just the show's winding down for people that are just joining us. We're going to talk about trade. We're going to talk about tariffs. We're going to talk about maybe Amazon's earnings miss. We're going to talk about nuclear submarines. moving toward Russia. But what we're talking about, folks, is that moments ago, the President of

the President's United States ordered the firing of the person who puts together the jobs numbers, effectively saying that they were fake. You can go back and read the President's own words. I do not want to put words in the President's mouth. You can read them for yourself. And what we've been debating and discussing, number one, the market reaction. You could see we're down across the board. We were down before this. In fact, they didn't come off the lows. By the way, Michelle, Steve Leeson, we're going to say goodbye. I'm sure. Every show we'll take you for the next few shows. Michelle, we're going to wrap it up here.

Final comment. This is going to dominate the news media, at least our side of it. So the market was super bubbly. We got not good jobs numbers, right? We got a lot more tariffs. We have submarines moving towards Russia. And the market's off more than 1%. That's it.

Not a bad market, by the way. I would have expected more. Other than that, how was the plane Mrs. Lincoln? Not a bad market reaction, considering all we just talked. talked about. I want to go out of positive. I'm going back to the Midwest. I'm off next week. Thank you, Michelle, Steve, Eamon, everybody. Great job. Everybody in the control room. I'll see in a week. Closing bell, no doubt. We'll pick up the story now.