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Sarah Wasko / Media Matters

Research/Study Research/Study

Economists blame the Fed for jobs report missing expectations. Trump sycophants instead blamed Kamala Harris.

Economists agree the Federal Reserve should have already begun cutting interest rates, and that the economy is still strong

Written by Zachary Pleat

Research contributions from Craig Harrington

Published

On August 2, the Bureau of Labor Statistics released the jobs report for July 2024, showing 114,000 jobs created in the previous month and the unemployment rate rising from 4.1% to 4.3%. Both measurements missed expectations. Economists quickly explained that while the overall economy is still strong, this jobs report indicates that the Federal Reserve has been late in cutting interest rates, which remained unchanged after the Federal Open Market Committee met earlier this week.

Despite these facts, pro-Trump pundits, activists, and social media accounts rushed to blame the jobs report missing expectations on likely Democratic presidential nominee Vice President Kamala Harris. This blame is even more misplaced given that the Fed, which sets interest rates and has a dual mandate of pursuing full employment alongside low and stable inflation, is an independent agency and is still chaired by Republican Trump appointee Jerome Powell.

  • Multiple economists connect the missed jobs report to inaction by the Fed, note that the economy is still strong overall

    • Moody’s Analytics chief economist Mark Zandi: “The clear message in today’s soft jobs report is the Federal Reserve needs to cut interest rates. They should have begun cutting rates months ago.” Zandi continued: “Wage growth and inflation are back to the Fed’s target. The question isn’t whether the Fed should cut in September, but by how much.” [Twitter/X, 8/2/24]
    • American Economic Liberties Project’s Bharat Ramamurti: “The Fed failing to cut rates in July was a mistake and it needs to rectify that mistake in September with a cut of 50 bps or more.” Ramamurti also noted, “It’s not time to panic — there are still many underlying signs of strength in the economy and unemployment remains low by historical standards.” [Twitter/X, 8/2/24]
    • Economic Policy Institute senior economist Elise Gould: “The labor market data out this morning suggests the Fed has waited too long to lower interest rates.” [Twitter/X, 8/2/24]
    • EPI economist Hilary Wething: “Today's #jobsreport really shows the cost of the Fed's inaction. Unemployment ticked up and payroll growth is sluggish. It doesn't have to be this way.” [Twitter/X, 8/2/24]
    • Yale University’s The Budget Lab director of economics Ernie Tedeschi: “Now it’s a lot clearer” that “monetary policy was behind the curve.” Tedeschi added: “I thought the Fed should have cut last week.” [Twitter/X, 8/2/24]
    • Nobel Prize-winning economist Paul Krugman: “Dear Fed: As some of us have been saying for a while, you’re well behind the curve. Inflation has been beaten; labor market weakening fast. Cut, cut, cut.” In a column published several days prior to the jobs report, Krugman wrote that while “other indicators are looking stronger,” “the job market is looking a bit, shall we say, pre-recessionary” due to the Fed’s inaction. He added: “There is already a very strong case for cutting interest rates.” [Twitter/X, 8/2/24; The New York Times, 7/30/24]
    • Washington Center for Equitable Growth’s Michael Linden: “Fed should have cut.” [Twitter/X, 8/2/24]
    • Center for American Progress senior director of economic policy Brendan Duke noted that more than 20% of Trump’s pre-pandemic economy had lower job creation than the July report. Duke wrote: “It would've been a normal, somewhat below average month under Trump. It looks really week under Biden because job creation has been so strong.” [Twitter/X, 8/2/24]

  • Trumpists decide to pin the missed expectations on Vice President Harris instead

    • Fox Business host Stuart Varney: Harris has to “put out an ad that refutes the whole idea that she’s responsible for any of this economy.” [Fox Business, Varney & Co., 8/2/24]
    • Trump campaign senior adviser Chris LaCivita responded to a post on the missed expectations from the jobs report: “The Harris/Biden economy …” [Twitter/X, 8/2/24]
    • GOP strategist Alex Bruesewitz: “Bidenomics is dead. This is Kamalanomics now.” [Twitter/X, 8/2/24]
    • On X (formerly Twitter), the “Trump War Room” account twice posted “Kamalanomics” in response to coverage of the jobs report. In another post, it added: “Kamala Harris has destroyed the booming Trump economy that she inherited — we need TRUMP back!” [Twitter/X, 8/2/24, 8/2/24, 8/2/24]
    • Radio host James Golden, also known as Bo Snerdley: “You mean the Joe Biden - Kamala Harris economy isn't producing near enough jobs? Oh. What a shock.” [Twitter/X, 8/2/24]