Trillions of dollars in blood! Non-farm payroll figures and Trump's "data coup" changed the global market overnight
2025-08-04 10:05:00
The US dollar index closed down 1.38% at 98.68 points last trading day, ending a six-day winning streak. On Monday (August 4th) in Asia, the dollar index rebounded slightly by 0.14%, trading around 98.82. Last Friday, all three major US stock indices closed lower, with the Dow Jones Industrial Average down 1.23% to 43,588.58, the S&P 500 down 1.60% to 6,238.01, and the Nasdaq down 2.24% to 20,650.13. The phrase "Over $1 trillion in market capitalization evaporated from the US stock market" briefly became a trending topic.
The US July non-farm payroll data fell sharply short of expectations (only 73,000 new jobs were added, far below the market expectation of 110,000). This, coupled with significant downward revisions to the May and June figures (a combined decrease of 258,000), has fueled market concerns about the risk of a US recession. Federal Reserve fund futures pricing indicates that the market has fully priced in two interest rate cuts this year, with an 82% probability of the first occurring in September. Furthermore, the Trump administration's dismissal of the Director of the Bureau of Labor Statistics and pressure on the Federal Reserve to cut interest rates have further undermined market confidence in policy independence, exacerbating selling pressure on the US dollar and US stocks.
Weak employment data and the Federal Reserve's dovish message combined to drive the US dollar lower across the board. While the dollar maintained its lead among major currencies this week, its lead appears fragile. If the sell-off continues into the weekend, the dollar could lose its weekly lead. The Canadian dollar is in second place, followed by the Japanese yen. Meanwhile, the euro remains the weakest, followed by the New Zealand dollar and the Swiss franc. The British pound and Australian dollar are in the middle of the pack. However, with market volatility expected to persist, the rankings could shift before the weekend.
Kevin Hassett, director of the National Economic Council, pointed to revised data in last Friday's (August 1st) jobs report as "evidence" supporting President Donald Trump's decision to fire Erica McEntee. "I mean, the revised data is the smoking gun," he said on "Meet the Press." Hassett rejected suggestions that the abrupt firing was an example of Trump making an example of someone because of weak data. He said the president "wanted to appoint his own people," suggesting that Trump's appointees would make the data "more transparent and more reliable."
National Economic Council Director Kevin Hassett defended President Donald Trump's abrupt firing of the head of the Bureau of Labor Statistics on Sunday (August 3), without citing specific evidence. Hassett repeatedly pointed to the manipulation of jobs data from Friday (August 1) to justify Trump's dismissal of BLS Director Erica McEntrapper, but offered no data to support Trump's claim that the latest jobs report was "manipulated." "I mean, the manipulation of the data is the smoking gun," he said on NBC News, adding that "there are some patterns that might raise questions." Revisions to jobs reports are common because preliminary estimates typically become more refined as more payroll data is collected in subsequent months. These data rely on surveys of employers, and some businesses may have failed to submit data by the initial reporting deadline. Trump fired McEntrapper on Friday, accusing her of manipulating the jobs data for political purposes after the latest report included a downward revision of job growth for the previous two months.
Hassett dismissed the revisions as "historically significant outliers," saying they raise broader doubts about the data. He also rejected suggestions that Trump was making an example of someone because the jobs data came in below expectations. Instead, he said the president "wants to appoint his own people," suggesting that Trump's appointees would make the data "more transparent and more reliable." "If there are big changes and big revisions, like we expect to see more big revisions in the September jobs data, then we want to know why and we want someone to explain it to us," he continued. Hassett did not say whether the White House asked McEntire to explain the large downward revisions before firing her.
McEntaffer's dismissal came after the Bureau of Labor Statistics reported weaker-than-expected employment figures. The totals for June and May were revised down significantly, by a combined 258,000 jobs from the previously reported levels, to a combined 286,000 jobs for May and June. Trump often praised strong employment figures during economic growth.
Trust issues
McEnthaler's dismissal sparked a backlash from economists and others who worried the move could undermine trust in government data in the future. William Beach, a former BLS commissioner appointed by Trump, said the firing was "completely unwarranted" and "sets a dangerous precedent that undermines the bureau's statistical mission," as he wrote in a post on X shortly after the dismissal.
On Sunday (August 3rd) local time, Beach said the dismissal was "harmful" and "damaged the credibility of the agency." "Let's say they appoint a new director, and this person, whether male or female, is the best candidate, right? If they release a bad number," "everyone will think, well, it may not be that bad because they will suspect political influence." Senate Minority Leader Chuck Schumer, Democrat of New York, and Senator Ron Wyden, Democrat of Oregon, echoed Beach's criticism. Schumer said Trump was acting like a "bad leader" and a dictator. "Donald Trump, firing her will not alleviate the chaos caused by your chaotic tariff system," Schumer said on the Senate floor. Wyden slammed Trump's dismissal, calling it "the act of a weak person who is afraid to face the reality of the damage his own chaos has done to our economy." "Ultimately, Trump wants to manipulate the data," Wyden, the chief Democrat on the Senate Finance Committee, said in a statement after Trump fired McEntire.
Data collection issues
While many have criticized the controversial firing of the head of the Bureau of Labor Statistics, others have questioned whether the methodology long used to compile employment data needs to be revisited. Bank of America CEO Brian Moynihan, for example, said the government uses surveys to obtain employment data, which are "frankly no longer as effective." "I think there are other ways they can get this data, and that should be the focus," he said on CBS News on August 3. "How do you get the data so it's more resilient, more predictable, and more understandable?" he continued. "We have to find objective statistics somewhere," Senator Rand Paul, Republican of Kentucky, said last Friday (August 1). "When the person who provides the statistics is fired, it makes it much more difficult to judge the statistics without being influenced by politics," Paul told NBC News, emphasizing the need for trustworthy data.
Technically , the US dollar index has retraced to the neckline of a double bottom pattern on the daily chart, the MACD has retraced to the zero axis, and the RSI has retraced to the 50 bullish and bearish lines, all indicating upward momentum and potential for a rebound. The evening star pattern formed last Friday (August 1st) is putting downward pressure on the dollar's continued rise.
(Daily chart of the US dollar index, source: Yihuitong)
At 10:04 Beijing time, the US dollar index is currently at 98.82.
The US July non-farm payroll data fell sharply short of expectations (only 73,000 new jobs were added, far below the market expectation of 110,000). This, coupled with significant downward revisions to the May and June figures (a combined decrease of 258,000), has fueled market concerns about the risk of a US recession. Federal Reserve fund futures pricing indicates that the market has fully priced in two interest rate cuts this year, with an 82% probability of the first occurring in September. Furthermore, the Trump administration's dismissal of the Director of the Bureau of Labor Statistics and pressure on the Federal Reserve to cut interest rates have further undermined market confidence in policy independence, exacerbating selling pressure on the US dollar and US stocks.
Weak employment data and the Federal Reserve's dovish message combined to drive the US dollar lower across the board. While the dollar maintained its lead among major currencies this week, its lead appears fragile. If the sell-off continues into the weekend, the dollar could lose its weekly lead. The Canadian dollar is in second place, followed by the Japanese yen. Meanwhile, the euro remains the weakest, followed by the New Zealand dollar and the Swiss franc. The British pound and Australian dollar are in the middle of the pack. However, with market volatility expected to persist, the rankings could shift before the weekend.
Kevin Hassett, director of the National Economic Council, pointed to revised data in last Friday's (August 1st) jobs report as "evidence" supporting President Donald Trump's decision to fire Erica McEntee. "I mean, the revised data is the smoking gun," he said on "Meet the Press." Hassett rejected suggestions that the abrupt firing was an example of Trump making an example of someone because of weak data. He said the president "wanted to appoint his own people," suggesting that Trump's appointees would make the data "more transparent and more reliable."
National Economic Council Director Kevin Hassett defended President Donald Trump's abrupt firing of the head of the Bureau of Labor Statistics on Sunday (August 3), without citing specific evidence. Hassett repeatedly pointed to the manipulation of jobs data from Friday (August 1) to justify Trump's dismissal of BLS Director Erica McEntrapper, but offered no data to support Trump's claim that the latest jobs report was "manipulated." "I mean, the manipulation of the data is the smoking gun," he said on NBC News, adding that "there are some patterns that might raise questions." Revisions to jobs reports are common because preliminary estimates typically become more refined as more payroll data is collected in subsequent months. These data rely on surveys of employers, and some businesses may have failed to submit data by the initial reporting deadline. Trump fired McEntrapper on Friday, accusing her of manipulating the jobs data for political purposes after the latest report included a downward revision of job growth for the previous two months.
Hassett dismissed the revisions as "historically significant outliers," saying they raise broader doubts about the data. He also rejected suggestions that Trump was making an example of someone because the jobs data came in below expectations. Instead, he said the president "wants to appoint his own people," suggesting that Trump's appointees would make the data "more transparent and more reliable." "If there are big changes and big revisions, like we expect to see more big revisions in the September jobs data, then we want to know why and we want someone to explain it to us," he continued. Hassett did not say whether the White House asked McEntire to explain the large downward revisions before firing her.
McEntaffer's dismissal came after the Bureau of Labor Statistics reported weaker-than-expected employment figures. The totals for June and May were revised down significantly, by a combined 258,000 jobs from the previously reported levels, to a combined 286,000 jobs for May and June. Trump often praised strong employment figures during economic growth.
Trust issues
McEnthaler's dismissal sparked a backlash from economists and others who worried the move could undermine trust in government data in the future. William Beach, a former BLS commissioner appointed by Trump, said the firing was "completely unwarranted" and "sets a dangerous precedent that undermines the bureau's statistical mission," as he wrote in a post on X shortly after the dismissal.
On Sunday (August 3rd) local time, Beach said the dismissal was "harmful" and "damaged the credibility of the agency." "Let's say they appoint a new director, and this person, whether male or female, is the best candidate, right? If they release a bad number," "everyone will think, well, it may not be that bad because they will suspect political influence." Senate Minority Leader Chuck Schumer, Democrat of New York, and Senator Ron Wyden, Democrat of Oregon, echoed Beach's criticism. Schumer said Trump was acting like a "bad leader" and a dictator. "Donald Trump, firing her will not alleviate the chaos caused by your chaotic tariff system," Schumer said on the Senate floor. Wyden slammed Trump's dismissal, calling it "the act of a weak person who is afraid to face the reality of the damage his own chaos has done to our economy." "Ultimately, Trump wants to manipulate the data," Wyden, the chief Democrat on the Senate Finance Committee, said in a statement after Trump fired McEntire.
Data collection issues
While many have criticized the controversial firing of the head of the Bureau of Labor Statistics, others have questioned whether the methodology long used to compile employment data needs to be revisited. Bank of America CEO Brian Moynihan, for example, said the government uses surveys to obtain employment data, which are "frankly no longer as effective." "I think there are other ways they can get this data, and that should be the focus," he said on CBS News on August 3. "How do you get the data so it's more resilient, more predictable, and more understandable?" he continued. "We have to find objective statistics somewhere," Senator Rand Paul, Republican of Kentucky, said last Friday (August 1). "When the person who provides the statistics is fired, it makes it much more difficult to judge the statistics without being influenced by politics," Paul told NBC News, emphasizing the need for trustworthy data.
Technically , the US dollar index has retraced to the neckline of a double bottom pattern on the daily chart, the MACD has retraced to the zero axis, and the RSI has retraced to the 50 bullish and bearish lines, all indicating upward momentum and potential for a rebound. The evening star pattern formed last Friday (August 1st) is putting downward pressure on the dollar's continued rise.
(Daily chart of the US dollar index, source: Yihuitong)
At 10:04 Beijing time, the US dollar index is currently at 98.82.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
