MICHEL MARTIN, HOST:
President Trump says tariffs are driving an economic boom, but the data tells a more complicated story. In a few minutes, we'll ask Senator Amy Klobuchar how it looks from Capitol Hill and what Congress should do next. But first, here's how National Economic Council Director Kevin Hassett put it over the weekend on NBC's "Meet The Press."
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KEVIN HASSETT: With the eye on the horizon, the economic outlook is huge. It's great. We've got the big beautiful bill. We've got AI increasing productivity. We've got everything, and we've got all the tariff revenue coming in. So we have every confidence that the economy is headed way, way up from here.
MARTIN: A slew of recent economic data casts doubt on that rosy forecast, though. The news was bad enough that President Trump fired one of the government's top number crunchers.
LEILA FADEL, HOST:
NPR's Scott Horsley joins us now to talk about all of this. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Leila.
FADEL: OK, Scott, both the president and the people around him say the U.S. economy is the hottest in the world. What do the numbers show?
HORSLEY: Well, there's no question the U.S. economy was doing pretty well when President Trump came into office. Last fall, The Economist magazine called it the envy of the world. But some of that shine has been tarnished since then. Last week, we got a sobering batch of data that painted a less than flattering picture of the economy six months into the president's term. Job growth is slowing down. Inflation is speeding up, and the overall economy is growing more slowly now than it did in each of the last two years. Now, some of this could be statistical noise. You don't want to overreact to one month or even one quarter's numbers. But it certainly raises a caution flag as the president aggressively pursues policies like tariffs and mass deportations that economists have warned could be an economic drag.
FADEL: Now, Trump was clearly unhappy about the jobs numbers, so he fired the head of the bureau that produced them. What's the reaction been to that?
HORSLEY: Well, the reaction from economists across the political spectrum has been bad. They've denounced the president's move as something out of an authoritarian playbook. It's the kind of thing you might see in China, and it's why China's official economic data is not considered very trustworthy. U.S. government data, on the other hand, has long been considered the gold standard. Now, to be sure, numbers do get revised from month to month as additional information becomes available. But that's generally seen as a strength, not a weakness. The latest revision showed job growth in May and June was much weaker than initially reported. Trump might not like that, but he has offered zero evidence to back his claim that the numbers were manipulated to make him look bad.
FADEL: Now, Trump has also been demanding that the Federal Reserve lower interest rates. The central bank did not take that step last week. Will weaker job numbers make a rate cut more likely in the future?
HORSLEY: They might. The two dissenting Fed governors who voted in favor of cutting rates last week said they did so partly out of concern that the job market might be showing signs of stress. Friday's dismal jobs report could certainly push more Fed policymakers in that direction. But, you know, concern about the sagging job growth has to be balanced against worries of rising inflation, which would argue against cutting interest rates. Inflation has started to creep up as Trump's tariffs take hold, and Fed Chairman Jerome Powell says that's something he and his colleagues are watching closely.
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JEROME POWELL: A reasonable base case is that the effects on inflation could be short-lived, reflecting a one-time shift in the price level. But it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed.
HORSLEY: We'll get two more monthly snapshots of both the job market and inflation before the next Fed meeting in September. Those reports will come from the same government number crunchers as last week's, people who are doing their best to get it right despite a lot of political heat from the White House.
FADEL: NPR's Scott Horsley. Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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