President Donald Trump dismissed a top Labor Department official on Friday following a disappointing U.S. jobs report, accusing her—without evidence—of manipulating employment figures. The move comes as concerns mount over the credibility of U.S. economic data and intensifies political tension surrounding the Federal Reserve.
The Bureau of Labor Statistics (BLS) reported that the U.S. economy added just 73,000 jobs in July, far below expectations. More alarming were downward revisions showing 258,000 fewer jobs created in May and June. Trump alleged that Erika McEntarfer, a Biden appointee, falsified the data and announced on Truth Social that she would be “immediately” replaced. BLS representatives have not commented.
Experts warn that politicizing economic statistics could erode trust in key indicators like employment and inflation reports, which guide markets and policymaking. Data collection challenges have intensified since the pandemic, with response rates for BLS employment surveys dropping from 80% in 2020 to about 67% in July 2025. Analysts fear this decline in data quality may mislead investors and hinder effective policy decisions.
Adding to market volatility, Federal Reserve Governor Adriana Kugler unexpectedly announced her resignation, creating an earlier-than-expected vacancy on the Fed’s Board of Governors. This gives Trump a key opportunity to shape monetary policy ahead of Fed Chair Jerome Powell’s term expiration next year. Speculation is growing that Trump may nominate close economic allies such as Kevin Hassett or Chris Waller, potentially influencing future rate cuts.
The twin developments rattled Wall Street, with the S&P 500 plunging 1.6%, its steepest drop in over two months, amid ongoing concerns over tariffs and the slowing U.S. labor market.