Trump Tariffs May Impact Jobs Report With 110,000 Increase Expected

Investors are eagerly awaiting the release of the U.S. federal government’s official jobs number, which is expected to provide insights into the economic impact of the Trump Administration’s policies. The consensus estimate for the non-farm payroll jobs number is an increase of 110,000, but some analysts believe that the damage from President Trump’s tariff regime may finally be reflected in the hard data, potentially resulting in a lower number.

President Trump, who had an advance look at the jobs number, took to social media to criticize U.S. Federal Reserve Chairman Jerome Powell. This action has led some to speculate that Trump may be attempting to shift blame for any negative economic indicators away from the White House and onto the Federal Reserve.

Economists generally agree that Trump’s tariff policy could harm the economy by increasing the cost of imports and shifting supply chains to the U.S., where manufacturing is less efficient. However, inflation and the unemployment rate have remained relatively stable, and initial data suggests minimal economic damage. In fact, businesses may have increased economic activity in the first half of the year by over-ordering from overseas to avoid tariffs.

Despite this, there have been job cuts in the federal government and mass layoffs at several companies, including Microsoft. The ADP private payroll report indicated a reduction of 33,000 jobs in June. However, analysts at Pantheon Macroeconomics have expressed skepticism about the ADP report, citing its poor forecasting track record. They also noted concerns about private residential construction, which declined by 6.7% year-over-year in May.

Pantheon Macroeconomics is estimating a 100,000 increase in non-farm payrolls, while Goldman Sachs predicts an 85,000 increase. The consensus estimate is 110,000. Goldman Sachs also noted that the termination of Temporary Protected Status for approximately 350,000 Venezuelan migrants in mid-May could impose a 25,000 drag on the jobs number, and they expect a 15,000 decline in federal government payrolls. UBS also suggested that the jobs report might be weak, citing Trump’s social media post as a potential signal of weaker data.

Investors are closely watching these indicators, as well as Trump’s attempts to blame Powell for economic issues, and the recent buying activity of retail traders. These factors suggest that investors may be betting on a grim jobs report. However, if the actual jobs number exceeds expectations, it could lead to market volatility as investors adjust their positions.