Wall Street falls the most since May after employers slash hiring and tariffs roll out
The S&P 500 fell 1.6%, its biggest decline since May 21 and its fourth straight loss. The index is also posted a 2.4% loss for the week, marking a sharp shift from last week's record-setting streak of gains.
The Dow Jones Industrial Average fell 1.2%, while the Nasdaq composite fell 2.2%.
Worries on Wall Street about a weakening economy were heavily reinforced by the latest report on job growth in the U.S. Employers added just 73,000 jobs in July. That is sharply lower than economists expected. The Labor Department also reported that revisions shaved a stunning 258,000 jobs off May and June payrolls.
Markets also reacted to the latest
tariff news
. President Donald Trump announced tariff rates on dozens of countries and pushed back the scheduled effective date to Aug. 7, adding more uncertainty to the global trade picture.
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Yahoo
38 minutes ago
- Yahoo
Trump fires labor statistics chief hours after data showed jobs growth slowed
Donald Trump fired the federal government official in charge of labor statistics, hours after data revealed jobs growth stalled this summer, prompting accusations that he is 'firing the messenger'. The US president claimed that Erika McEntarfer, commissioner of labor statistics, had 'faked' employment figures in the run-up to last year's election, in an effort to boost Kamala Harris's chances of victory. Trump later claimed: 'Today's Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad'. He produced no evidence for these allegations, and insisted that the US economy was, in fact, 'BOOMING' on his watch. But Friday's employment figures told a very different story, and raised questions about the state of the labor market since Trump's return to office. 'We need accurate Jobs Numbers,' he wrote on Truth Social. 'I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified.' McEntarfer was contacted for comment. The Bureau of Labor Statistics (BLS) confirmed in a brief statement that she had been dismissed. William Wiatrowski, the agency's deputy commissioner, will serve as acting commissioner. Trump's abrupt announcement came as administration officials scrambled to explain a lackluster employment report. Not only did jobs growth fail to meet expectations in July, but previous estimates for May and June were revised significantly lower. The president was promptly accused of trying to hide accurate statistics. 'Trump is firing the messenger because he doesn't seem to like jobs numbers that reflect how badly he's damaged the economy,' said Lily Roberts, managing director for inclusive growth at the Center for American Progress, a thinktank. 'Politicizing our country's collection of data on what's going on in the economy … will make it harder to create an economy that makes sure everyone has a good job,' added Roberts. 'Borrowing from the authoritarian playbook fuels more uncertainty that will cost Americans for years to come.' Paul Schroeder, executive director of the Council of Professional Associations on Federal Statistics, described the president's allegation as 'very damaging and outrageous', adding: 'Not only does it undermine the integrity of federal economic statistics but it also politicizes data which need to remain independent and trustworthy. This action is a grave error by the administration and one that will have ramifications for years to come.' McEntarfer is a widely respected economist and veteran employee of the federal government. She previously worked at the US Census Bureau under George W Bush and at the US census bureau under Barack Obama, Trump and Joe Biden. In January 2024, before McEntarfer's confirmation for her current post by the US Senate, her nomination was backed by four former BLS commissioners. In a letter also signed by organizations including the American Statistics Association and a string of senior economists, they said there were 'many reasons' to confirm McEntarfer as commissioner of labor statistics, citing her 'wealth of research and statistical experience'. She was ultimately confirmed by a vote in the Senate, with 86 votes cast in favor and eight against. Gene Sperling, chair of the national economic council under Bill Clinton and Obama, and who worked as an official under Biden, said he expected Trump to 'destroy the credibility' of economic data when his administration suffered its first bad jobs report. 'Now: first bad job report, and he just fired BLS head over absurd claims of bias,' Sperling wrote on X, formerly Twitter. Trump's decision to fire McEntarfer was 'outrageous but not surprising', said Julie Su, former acting US labor secretary under Biden. 'He hates facts, so he blames truth-tellers.' The US 'needs and deserves trustworthy economic data', added Su. 'This is a pathetic attempt by the president to gaslight everyone about the consequences of his disastrous economic policies.'
Yahoo
38 minutes ago
- Yahoo
Republicans slam Trump's firing of Bureau of Labor Statistics chief
Senior Republican lawmakers are condemning the decision of their party leader, Donald Trump, to fire the leading US labor market statistician after a report that showed the national economy added just 73,000 jobs – far fewer than expected – in July. The disappointing figures – coupled with a downward revision of the two previous months amounting to 258,000 fewer jobs and data showing that economic output and consumer spending slowed in the first half of the year – point to an overall economic deterioration in the US. Trump defended his decision to fire US Bureau of Labor Statistics (BLS) commissioner Erika McEntarfer. Without evidence to back his claims, the president wrote on social media that were numbers were 'RIGGED in order to make the Republicans, and ME, look bad' and the US economy was, in fact, 'BOOMING' on his watch. Related: Trump fires labor statistics chief hours after data showed jobs growth slowed But the firing of McEntarfer, who had been confirmed to her role in January 2024 during Joe Biden's presidency, has alarmed members of Trump's own party. 'If the president is firing the statistician because he doesn't like the numbers but they are accurate, then that's a problem,' said Wyoming Republican senator Cynthia Lummis. 'It's not the statistician's fault if the numbers are accurate and that they're not what the president had hoped for.' Lummis added that if the numbers are unreliable, the public should be told – but firing McEntarfer was 'kind of impetuous'. North Carolina senator Thom Tillis, a Republican, said: 'If she was just fired because the president or whoever decided to fire the director just … because they didn't like the numbers, they ought to grow up.' Kentucky senator Rand Paul, another Republican, questioned whether McEntarfer's firing was an effective way of improving the numbers. 'We have to look somewhere for objective statistics,' he said. 'When the people providing the statistics are fired, it makes it much harder to make judgments that you know, the statistics won't be politicized.' According to NBC News, Paul said his 'first impression' was that 'you can't really make the numbers different or better by firing the people doing the counting'. Tillis and Paul were both opponents of Trump's recent economic legislative package, which the president dubbed the 'big, beautiful bill'. But Alaska senator Lisa Murkowski, a Republican who supported the legislation after winning substantial economic support for her state, remarked that the jobs numbers could not be trusted – and 'that's the problem'. 'And when you fire people, then it makes people trust them even less,' she said. William Beach, a former BLS commissioner appointed by Trump in his first presidency, posted on X that McEntarfer's firing was 'totally groundless'. He added that the dismissal set a dangerous precedent and undermined the BLS's statistical mission. Beach also co-signed a letter by 'the Friends of the Bureau of Labor Statistics' that went further, accusing Trump of seeking to blame someone for bad news and calling the rationale for McEntarfer's firing 'without merit'. The letter asserted that the dismissal 'undermines the credibility of federal economic statistics that are a cornerstone of intelligent economic decision-making by businesses, families and policymakers'. The letter pointed out that the jobs tabulation process 'is decentralized by design to avoid opportunities for interference', adding that US official statistics 'are the gold standard globally'. 'When leaders of other nations have politicized economic data, it has destroyed public trust in all official statistics and in government science,' the letter said. Democrats have also hit out at Trump's decision. Vermont senator Bernie Sanders described it as 'the sign of an authoritarian type', and he said the decision would make it harder for the American people 'to believe the information that comes out of the government'. Paul Schroeder, executive director of the Council of Professional Associations on Federal Statistics, described the president's allegation against McEntarfer as 'very damaging and outrageous'. He said: 'Not only does it undermine the integrity of federal economic statistics, but it also politicizes data which need to remain independent and trustworthy. This action is a grave error by the administration and one that will have ramifications for years to come.'
Yahoo
40 minutes ago
- Yahoo
Drugmakers are pouring billions of dollars into new US manufacturing. It still won't achieve all of Trump's tariff goals
Ever since President Donald Trump started promising to slap tariffs on pharmaceutical imports, drugmakers have unveiled a flurry of commitments to build or expand US manufacturing operations in the coming years. AstraZeneca is investing $50 billion to expand its drug manufacturing in the US. Johnson & Johnson is pouring $55 billion into domestic production and research. And Eli Lilly said it will spend $27 billion to build four new manufacturing plants here. In total, the planned investments exceed $250 billion, according to two industry analysts. Trump is wielding the threat of tariffs to get drugmakers to increase their domestic production, which he says will strengthen national security. He's also pushing pharmaceutical companies to reduce their prices, one of his longstanding goals. But the pharma companies' moves are not expected to decrease the United States' reliance on foreign sources for key pharmaceutical ingredients and drugs, experts say. Nor are they likely to result in lower costs for American consumers. Still, the White House regularly touts the steady drumbeat of commitments as proof Trump's strategy is working. 'Another win for American manufacturing. @AstraZeneca's $50 billion pledge to expand U.S. manufacturing and R&D shows our tariff strategy at work,' Commerce Secretary Howard Lutnick posted on X in late July. 'The investment will bring high-paying jobs to Virginia, Indiana, Texas, and across the country while hardening our supply chains. Reshoring pharma production is one of our top priorities.' But it's just not that simple. Complex supply chain The pharmaceutical industry is a global web, with ingredients and finished drugs being manufactured in a multitude of locations around the world. The economics of brand name and generic drug manufacturing vary widely, and the price that the US consumer ultimately pays is determined by multiple players and factors. Both American and foreign drugmakers already produce many medications in the US and have been investing in their operations here for years. The prospect of tariffs certainly has prompted some brand-name manufacturers to shift more production to the US. However, some of the investments were already in the works before Trump took office, and other commitments may never be fulfilled, analysts say. Johnson & Johnson's $55 billion investment announcement in March, for instance, included the building of a North Carolina facility that was originally unveiled in October. 'They are just reiterating it because they're probably trying to make sure that the president is aware that they have manufacturing here and that they are listening to him,' Evan Seigerman, senior biopharma analyst at BMO Capital Markets, said of pharmaceutical companies. 'They're playing ball. It's all about the deal with President Trump.' Generic drugmakers, however, are not making the same types of commitments – largely because they can't afford to, as their profit margins are much thinner. While certain generic medicines are made in the United States, including sterile injectable drugs, oral liquid medications and controlled substances, the majority of drugs in pill or capsule form are produced abroad, primarily in India. But two generic drug manufacturers have announced domestic investments in recent months, according to the Association for Accessible Medicines, a trade group for the generic and biosimilar drug industries. Hikma Pharmaceuticals USA said it would invest $1 billion by 2030 to expand its manufacturing and research and development capabilities in several US locations, while Amphastar Pharmaceuticals said it would quadruple its production in the next three to five years. They both manufacture sterile injectable drugs, among other products. Other companies are more hesitant. 'We're not sure the market will support it if we build it,' said John Murphy III, the industry association's CEO, noting that reimbursements are so low that companies may not get returns on their investments. Much of the national security concerns center on generic drugs, which account for more than 90% of US prescriptions and are also critical to medicine administered in hospitals and doctors' offices. A sizeable share of the supply chain for certain generic medications comes from abroad and could be disrupted during geopolitical crises, a risk that's been repeatedly flagged by a bipartisan group of senators. Blanket tariffs, however, won't spur more domestic manufacturing of these drugs, said Erin Fox, associate chief pharmacy officer at the University of Utah Health. 'It's highly, highly unlikely we will see generic production expand in the US without significant incentives for these companies,' she said. 'If we do move production on some drugs to the US because we want to be sure from a national security standpoint, that's fine, but that's going to cost money.' Just what tariffs the pharmaceutical industry will face – and on which products from which countries – remain to be seen. The Trump administration is in the midst of negotiating various trade deals and has yet to release the findings of its investigation into national security implications of drug imports, which is expected to set the stage for tariffs on the industry. In late July, Trump unveiled the framework of a deal with the European Union, which calls for a 15% tariff on pharmaceutical imports – though some generic drugs could be exempt. Trump had been signaling in recent weeks that he would soon announce drug tariffs of up to 200%, but that he would give drugmakers a year or so to expand their domestic production before the full amount kicks in. That would be enough time for some companies to expand existing operations, though building new facilities could take three to five years, experts said. Even so, it's difficult for the manufacturers to make significant longer-term investment decisions amid the uncertainty of both the tariffs and future presidential administrations. Cost considerations Increasing their domestic manufacturing will help brand name drug companies escape tariffs, though they may have to pay some levies if they import pharmaceutical ingredients from other countries. Still, making more drugs in the US doesn't mean that the products will be any cheaper for patients, experts say. For one thing, the cost of production is typically higher in the US, said Stephen Farrelly, ING's global health care sector lead. Plus, the prices that consumers pay are largely governed by the nation's complex health system, which includes manufacturers, insurers and pharmacy benefit managers, known as PBMs. So whether Americans get a break on the high cost of their prescriptions will also depend on whether the president can achieve his other initiatives, including bringing US prices more in line with those in Europe and reforming the PBM industry, he said. While brand name manufacturers have more wiggle room to absorb some of the increased expenses, many experts believe they will pass along at least some of the added burden to consumers – who could eventually feel it in their out-of-pocket cost at the pharmacy counter or in their monthly insurance premiums. As for generic medicine, shifting more manufacturing to the US would entail higher production costs, which these companies could not afford to cover. Tariffs would be more likely to prompt these drugmakers to pull out of the US market, exacerbating shortages. 'At a time when the administration is clearly looking to still keep the cost down, we don't see a wholesale redistribution of generic capacity towards the US anytime soon,' Farrelly said. Sign in to access your portfolio
