Trump demands interest rate cut as he blames Powell for shock US jobs slowdown
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Donald Trump yesterday demanded a US interest rate cut as he blamed Federal Reserve chief Jerome Powell for a shock jobs slowdown.
The president lashed out at ‘Too Late’ Powell after payroll firm ADP reported that job creation in the world’s biggest economy slowed last month to its lowest level in more than two years.
The outburst came as evidence also pointed to a dismal jobs market in Britain. In America, ADP figures showed that private payrolls rose 37,000 in May, the smallest gain since March 2023. Markets had expected an increase of 110,000.
More comprehensive official jobs data will be published tomorrow and will be closely watched for evidence that tariff uncertainty is hurting the economy. But Trump did not wait to go on the attack.
On his Truth Social platform, he said: ‘ADP number out.. “Too Late” Powell must now lower the rate. He is unbelievable. Europe has lowered nine times.’
The remarks are likely to reignite disquiet over Trump’s attacks on the central bank’s independence. He has previously rowed back on language suggesting he would fire Powell, after a market sell-off.
Meanwhile, in the UK, a survey showed employment in the private sector fell for the eighth month in a row in May, the longest losing streak – aside from the pandemic – since 2008 to 2010 during the financial crisis.
The slide was partly blamed on increased payroll costs, after national insurance and minimum wage hikes introduced by Chancellor Rachel Reeves took effect.
But on a brighter note, the purchasing managers’ index (PMI) figures suggested a return to growth for the private sector – thanks to a recovery for services, though manufacturing declined.
Tim Moore, economics director at S&P Global Market Intelligence, said the sector ‘regained its poise as receding concerns about US tariffs, recovering global financial markets and greater confidence among clients helped support growth’.
It came amid growing hopes of a Bank of England interest rate cut, with markets last night betting on a greater than 50/50 chance of one in August, and another cut later this year seen as increasingly likely.
Today, the European Central Bank is expected to cut its rate. It has already cut seven times since last June –not the nine claimed by Trump.
Figures this week showed a fall in inflation in the euro area to 1.9 per cent last month – below the bank’s 2 per cent target for the first time since September.
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