WSJ What’s News - Trump Orders Firing of Statistics Head After Weak July Jobs Report

Episode Date: August 1, 2025

P.M. Edition for Aug. 1. The jobs report, which showed sharply lower revised numbers for May and June, may open the door for the Fed to cut interest rates at its next meeting in September. WSJ finance news editor Christina Rexrode joins to discuss. Plus, software company Figma’s stock market debut yesterday saw its stock price jump 250% in its first day of trading, leaving some $3 billion on the table. We hear from Corrie Driebusch, who covers U.S. capital markets for the Journal, about why that happened. And President Trump says he will position two nuclear submarines “in the appropriate regions” in response to criticism from a former Russian leader. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Omada Health makes managing chronic conditions easier by supporting members between doctors' visits. Members are paired with a health coach empowered by insights from smart devices and AI-powered tools. Learn more at omadahealth.com. Omada Health is proudly NASDAQ listed. Trump fires the Labor Statistics Chief after a new report showed that U.S. hiring slowed in July, paving the way for a possible rate cut. This opens the door a little bit wider for the Fed to potentially cut in September.

But it's August 1st right now. Mid-September feels really far away. Plus, how does a company leave $3 billion on the table as it goes public? And is Amazon falling behind in the artificial intelligence race? It's Friday, August 1st. I'm Alex Osila for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

A new report from the Labor Department out today showed that the U.S. added a seasonally adjusted 73,000 jobs in July, below the gain of 100,000 jobs economists pulled by The Wall Street Journal had expected to see. It's a signal that pockets of weakness that had been marring the labor market are starting to take hold. I'm joined now by finance editor Christina Rexroad. Christina, what is driving jobs growth down? There's a couple of things. In the air, there's a lot of talk about tariffs making companies uncertain about hiring. A lot of places want to wait to hire until they have a little bit more clarity on where the economy is going. But the thing that really concerned people

is that the numbers for May and June were revised so much lower. The Labor Department said Friday that May added just 19,000 jobs and June added just 14,000. And it's normal to have revisions. What's a little concerning right now is that all the revisions

lately so far this year have all been negative. After today's jobs report came out, President Trump announced that he is firing the top official at the Bureau of Labor Statistics. What's going on there? What Trump said is that the BLS commissioner would be, and these are his words, replaced with someone much more competent and qualified. And then the president said that the government's job numbers have been manipulated for political purposes. We're not aware of any evidence of that. Christina, I'm wondering about the picture that all this data paints together because

73,000 jobs in July, it's a little lower than expected, but it's not like job contraction. And the unemployment number was 4.2, a little higher than 4.1 last month. What kind of picture does this paint about how the economy looks right now? That's a great question.

There are certainly going to be people who say, this looks really bad. This is the month where things really started to fall off a cliff. And reasonable people can say that. There's also an argument to make that you shouldn't pay too much attention to the headline jobs numbers. And the reason that some people are saying, well, the sky isn't falling, is that they note that the US.S. is in a position where

the supply of workers is probably going to decline. The point of that is that when the supply of workers declines, you can have job growth be lower without it really hurting the unemployment rate. Let's talk now about one organization that is definitely looking at this number, which is the Fed. What does this mean for them? So as we all know, the Fed is concerned about cutting rates too soon in case we are still in an era where inflation is about to shoot up. But they also do not wanna keep rates high where they are now if the job market is about to deteriorate.

So I would say this opens the door a little bit wider for the Fed to potentially cut in September. But it's August 1st right now, mid September feels really far away. And the Fed is gonna get a lot more information before that September meeting. They're going to get one more jobs report and two more consumer inflation or CPI reports. And who knows what those will say. That was WSJ Finance News Editor Christina Rexrhod.

Thanks so much, Christina. Thank you. Meanwhile, factory activity continued to slide backward in July, adding to signs of weakness in the sector. The Institute for Supply Management said today that its Purchasing Manager's Index of Manufacturing activity contracted to 48 in July from 49 in June. The reading below 50 points to contraction in activity in the sector. The week July jobs report and President Trump's revamped tariff plan weighed on markets today. Major U.S. indexes ended lower.

The tech-heavy Nasdaq led the losses, falling almost 2.25%. The S&P 500 dropped 1.6%. And the Dow faced its worst week since early April, sliding 1.2 percent. The VIX, a market volatility index often dubbed Wall Street's fear gauge, shot higher. President Trump said he would position two nuclear submarines, quote, in the appropriate regions in response to recent comments from former Russian President Dmitry Medvedev, escalating tensions with Moscow as the U.S. pressures Russia to end the war in Ukraine. In a social media post today, Trump criticized Medvedev, who earlier this week said Trump's

threat of new sanctions on Russia is a, quote, step towards war. The White House didn't immediately respond to a request for more information. The U.S. routinely keeps strategic submarines at sea that carry nuclear-tipped ballistic missiles as part of its nuclear deterrent. It isn't clear whether Trump was suggesting the U.S. would put more of these submarines to sea or why moving them to other areas of the ocean would add to U.S. nuclear firepower. But former U.S. officials and experts outside the government said it was striking that the U.S. president appeared to be engaging in the sort of nuclear signaling that American officials have long criticized Russian President Vladimir Putin for doing.

Coming up, why for a company, it's not always great news that its stock price jumps 250% on its first day of trading. More on that after the break. Get to Toronto's main venues like Budweiser Stage and the new Roger Stadium with Go Transit. Thanks to Go Transit's special online e-ticket fairs, a $10 one-day weekend pass offers unlimited travel on any weekend day or holiday, anywhere along the Go network. And the weekday group passes offer the same weekday travel flexibility across the network, starting at $30 for two people and up to $60 for a group of five. Buy your online Go pass ahead of the show at Gotransit.com slash tickets.

As we noted on yesterday's show, shares in software maker Figma posted eye-popping gains in their stock market debut Thursday. Also eye-popping was the $3 billion the company left on the table by underpricing its shares. Figma and selling shareholders raised $1.2 billion in the IPO. They could have pocketed much more had the initial shares priced at $33 apiece been priced higher. Corey Driebusch covers capital markets for the journal and is here now with more. Corey, what is going on with this apparent underpricing? Why did this happen? It seems for Figma and after a lot of conversations with people close to the deal that there were a few factors at play that kind of almost created a perfect storm for this crazy first day of trading. For starters, the company and its investors decided

to sell a really small number of shares. So that's already creating a scarcity or a small supply. At the same time, Figma executives decided they wanted to handpick investors who would be able to be the buyers of the company in the IPO. A lot of executives do this. That's not completely unusual. However, when a stock is in such high demand, some of the investors they wanted had more price sensitivity. So that put a cap on the IPO price. And finally, perhaps the largest factor was this fervent desire to own shares by retail investors. I've talked to bankers around this deal who said they did expect things to go a little crazy, but nowhere near this crazy of a 250% gain the first day.

It's generally not considered a great thing to have the difference between the first day closing price and the initial IPO price be so dramatically different. Who suffers when that happens? So this is debatable, but you could say anyone who sold in the IPO did suffer. And that would be the company and the selling shareholders, which were some of its early investors, because they could have gotten more for their stake. The argument that says they didn't really suffer is that most of the sellers still own quite a bit of the company. And so they still have the potential for all these

gains if these gains do indeed hold for a while longer. That was WSJ Reporter Cori Driebusch. Thanks so much, Cori. Thank you. Amazon reported its second quarter earnings yesterday. And though it was generally strong, it was marred by what was considered a disappointing showing by its Amazon Web Services cloud computing business. AWS revenue grew 17% from a year earlier to about $31 billion, merely in line with Wall Street's projections. That came after rivals Microsoft and Google reported accelerating growth in their own cloud units for the same period.

For more on what this means for the company, I'm joined by WSJ herd-on-the-street columnist Dan Gallagher. Dan, why was Amazon's cloud computing business disappointing last quarter? Well, it was because when you contrast it to the results that Microsoft and Google have already reported, they both showed that the growth rates of their cloud businesses actually picked up compared to the first quarter. And I think especially after Microsoft, Amazon having a much bigger cloud

and also playing really hard in AI, there was expectations on Wall Street that we would see that kind of pick up with AWS and they didn't show that. Its business is so diversified, its retail side and these last earnings were pretty good. The retail side is humming. So how important really is this cloud computing business

for Amazon's overall well-being? Well, it's still a smaller part of their revenue relative to retail. It was actually a really good retail quarter. And when you consider the fact that the online commerce business is being impacted by things like tariffs, weaker consumer spending, the fact that they went out with one of their stronger periods

in retail and strong retail profit margins was quite remarkable. But that's a well known business and like i said because the money in the interest of investors in a i. There's really a bulls eye essentially on a ws like a hyper focus and so And so until they start showing growth, they're picking up in ways that might be able to credit to things like Gen.A.I. I think investors are going to be a little bit hesitant with Amazon for a while. That was WSJ herd on the street columnist Dan Gallagher. Thanks so much, Dan. Thank you for having me. And that's What's News for this week. In case you missed it, we've got a bonus episode out today.

In What's News and Earnings, we'll be looking at how the companies that deliver the goods you use every day are dealing with President Trump's trade war. We'll be digging into what companies in the logistics industry are saying in their earnings reports and analyst calls. You'll find it in your What's News feed just before this podcast. Tomorrow, you can look out for our weekly markets wrap-up, What's News and Markets. Then on Sunday, we'll be taking a look at how travel is different these days, and what this means for travel in the future. That's in What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Pierre Bienamé, with supervising producer Michael Cosmides. Michael Lavelle wrote our theme music. Aisha El-Mousseline is our development producer. Scott Salloway

and Chris Zinsley are our deputy editors. And Philana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osala. Thanks for listening.