Extract from ABC News
Analysis
Donald Trump appears to be leading an increasingly overt push to dismantle and discredit government institutions. (Reuters: Ken Cedeno)
When figures were announced last Friday showing lower-than-expected growth in the United States labour force, a chill went through international markets and the global community of economists and policymakers.
There were just 73,000 extra jobs created in July (when 100,000-plus had been expected), while the monthly data set also included huge downward revisions to figures for May and June.
The weak numbers reflected a fall in both government and private-sector jobs, but economists also noted that the foreign-born labour force had declined by over 1 million people since Donald Trump came to office.
The numbers did not sit comfortably with the president's claims that a US economic renaissance was underway in his second term.
They were instead a bleak reminder that, at some point, there were likely to be economic consequences for the world of disruption he had unleashed on the US and global economies.
The relative strength of the US economy to date — apparently defying the price and activity shocks that had been predicted to flow from his erratic tariff announcements — has insulated the Trump administration politically from quite a lot of domestic unease.
But that could all change if the early signs of a slowdown we are now seeing start to accelerate.
Economic growth statistics released just before the labour force figures had already suggested that slowing consumption was driving the economy to lose momentum.
Former US Labor Department's Bureau of Labor Statistics commissioner Erika McEntarfer was sacked by President Donald Trump over jobs figures that showed much lower-than-expected growth. (Reuters: Supplied / US Bureau of Labor Statistics)
Ironically, perhaps, the weak numbers have added to the president's strident attacks on the US Federal Reserve, which he demands must cut interest rates.
But Trump did not see it that way and he shocked markets and observers by immediately announcing he was sacking the woman responsible for producing the job numbers.
His move to fire the head of the Bureau of Labor Statistics (BLS), Erika McEntarfer, is unprecedented and has raised questions about whether economic data upon which financial markets rely will now be subject to politicisation and thus be rendered non-credible.
"Last weeks Job's Report was RIGGED, just like the numbers prior to the Presidential Election were Rigged. That's why, in both cases, there was massive, record setting revisions, in favor of the Radical Left Democrats," Trump posted on Truth Social, claiming McEntarfer had manipulated the key economic data without offering any evidence.
The numbers, he said, were ridiculous.
"She will be replaced with someone much more competent and qualified. Important numbers like this must be fair and accurate, they can't be manipulated for political purposes," Trump said, claiming without evidence that she had massaged figures to help former president Biden, who had appointed her.
The Financial Times reported that David Wilcox, the former head of the Federal Economic Statistics Advisory Committee, which was disbanded by the Trump administration earlier this year, said firing the BLS commissioner would be "a serious blow to the integrity of the US statistical system".
It would raise questions among those who use the economic data about "whether the objective was to please the president or present the best possible picture of what's going on in the US economy", he told the FT.
A group headed up by the two previous heads of the agency, Friends of BLS, echoed that concern, noting to the FT that, "when leaders of other nations have politicised economic data and destroyed public trust in their data infrastructure, the consequences have been dire".
In conjunction with Trump's relentless attacks on the US Federal Reserve, and particularly its chair, Jerome Powell, the BLS sacking is seen as another brazen attack on the institutional underpinnings of the American economy.
In the first Trump term — a term that Donald Trump and his team had not really expected to win — many of the erosions in the superstructure of state came about more by neglect than deliberate design.
The writer Michael Lewis documented some alarming incidents of this in his book The Fifth Risk.
Lewis reported how the first Trump administration didn't appoint people to crucial jobs, including management of the US nuclear arsenal and nuclear waste in the Department of Energy, leaving them empty for years.
Or, it sought to appoint allies with commercial interests in a particular field to crucial jobs such as those heading the equivalent of the Bureau of Meteorology, where there had been attempts made to charge people for weather forecasts, including for tornadoes.
But the push to dismantle and discredit government institutions in the second Trump presidency is much more overt.
The president said this week he would appoint a new head of the BLS in the coming days, just as he would appoint a new member of the US Federal Reserve after one governor shocked markets by unexpectedly resigning early on the weekend.
Just as happened with the Supreme Court in the legal sphere, the president now has the opportunity to shape — and possibly distort — America's economic institutions.
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