Trump blames inflation and interest rates after strong August jobs report
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President Donald Trump dismissed the August jobs gain, attributing inflation to market forces and higher interest rates, while his administration defended its economic policies amid declining approval ratings.
President Donald Trump reacted to the August employment report, which showed 162,000 jobs added, by criticizing inflation and interest rates rather than highlighting the hiring increase. Speaking from the Oval Office, he said success does not cause inflation and called the market’s reaction "crazy."
Trump has repeatedly promised a new economic boom if he wins the 2024 election, but growth has averaged about 2% annually, slower than under the previous administration. He linked higher interest rates on U.S. debt to inflation and suggested that the United States could respond by halting trade with foreign partners. Treasury yields on the 10-year note rose to 4.79% on Friday.
"The administration’s credibility on growth, inflation, rates, debt and deficit dynamics have taken a hit given the outsized predictions that are not aligned with economic reality," said Joe Brusuelas, chief economist at RSM US.
Trump disputed conventional monetary policy, claiming that lower rates could boost GDP by 12% to 15% and break all records. His economic approval rating was reported at 32% in recent polling, down from 50% during the 2018 midterms.
White House Council of Economic Advisers chairman Christopher Phelan said the administration expects higher growth, citing artificial intelligence, tariffs and tax cuts as drivers of productivity and investment. He noted that recent job gains exceed the rate needed to keep pace with population growth.
Analysts warned that even sustained growth above 3% would only modestly reduce the federal debt, which has surpassed $40 trillion, and that relying on optimistic growth scenarios could be risky. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have promoted growth benefits at G20 meetings, while also working on plans to lower the debt and deficit levels.