Countless economists and business leaders are warning that President Donald Trump's steep new tariffs could have a devastating impact on the U.S. economy, leading to a recession, major price increases, supply chain problems, a weakening U.S. dollar and empty shelves in stores. Yet according to the U.S. Bureau of Labors Statistics' (BLS) employment report for April, the United States added 177,000 new jobs last month.
CNN's Pamela Brown asked Financial Times' Ed Luce to weigh in on the job numbers when he made a Friday, May 2 appearance on her show, and he argued the worst damage from Trump's tariffs will be forthcoming.
The positive job numbers for April, Luce told Brown, are "not that surprising" because "the tariffs have yet to really come into effect" — adding, "When they do, there's going to be a very different economic mood."
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Trump recently called for U.S. Federal Reserve Chairman Jerome Powell to be fired — a proposal he backed down from. And Luce offered some reasons why Trump is so obsessed with the Fed.
"I think (the April jobs report) is good news for the (Trump) Administration," Luce told Brown. "It's good news for the Federal Reserve, because that actually reduces pressure on it — notwithstanding what President Trump says to Jerome Powell. It reduces pressure on Powell to cut interest rates."
Brown asked why Trump keeps pushing for the Fed to lower interest rates even with "strong economic data."
Luce responded, "Well, remember, Trump is a property developer. He has, throughout his career, lived on low interest rates….. That has built his business model. He knows full well that lower interest rates make consumers feel more flush — more money in their pockets, lower mortgage, auto loan payments, etc. Credit card debt."
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"But remember, with tariff increases coming — and they are coming, and this jobs report today, I think, will be very quickly forgotten — with tariff increases coming, consumers are going to feel the opposite.
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Watch the full video below or at this link.