Donald Trump calls on Fed Chairman Jay Powell to lower U.S. interest rates as new data show weak private sector recruitment and a contraction in the service sector, which raises concerns about a slowdown.
Trump launched his attack on the U.S. central bank in a truth-society position on Wednesday, which he compared to the European Central Bank, which has been lowering interest rates this year while the Fed kept them stable.
"ADP Numbers!! "Too Late" Powell must now slow down. He is incredible!!! Europe has dropped 9 times!" Trump wrote, referring to the private sector salary numbers provided by U.S. companies' automatic data processing.
These figures show that workloads increased by just 37,000 jobs in May, the lowest monthly increase since March 2023. Soon after, the ISM service's activity index showed an unexpected and contracting unexpected contraction, which increased concerns about the U.S. economic outlook.
"Due to long-term tariff uncertainty, respondents continue to report on the difficulties of forecasting and planning and often cite efforts to delay or minimize ordering until the impact is more obvious," said Steve Miller, chairman of the ISM Services Business Inquiry Committee.
So far, the U.S. economy has shown signs of resilience in the face of Trump's aggressive protectionist trade policy and efforts to cut government plans and efforts.
But weak data on private recruitment and services could regain the attention that the world's largest economy will slow in the coming months.
Wednesday's soft data increased shares in Friday's monthly job figures, and shares they will tell the market about the health of the U.S. economy.
Economists surveyed by Bloomberg expect job creation to slow to 130,000 jobs in May, compared with 177,000 in April. The unemployment rate is expected to remain 4.2% in May.
Last week, Trump met with Powell at the White House and warned him that the Fed chairman did not reduce the central bank's main interest rate from the current 4.25% to 4.5%, which was a "mistake".
According to the Fed, Powell told Trump that monetary policy will be determined solely by economic data and that its decision will be “based on prudent, objective and non-political analysis only.”
Trump often publicly criticizes the Fed in terms of first and second presidents, which raises concerns about the president's destruction of the independence of the U.S. central bank.
But Trump recently stepped down from his previous suggestion that he would try to remove Powell from his position before his term ends in May 2026.