White House Touts Economic Boom While Manufacturing Jobs Vanish

MarketDash Editorial Team

12 hours ago

Kevin Hassett says Trump's policies are driving strong growth despite high interest rates, but recent jobs data tells a more complicated story about the impact of tariffs on American workers.

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A Tale of Two Economies

Kevin Hassett, Director of the National Economic Council, has a pretty straightforward take on the economy: it's thriving, and President Donald Trump deserves the credit. Speaking on CNBC's "Squawk Box" Monday, Hassett argued that "the economy is booming right now because of Trump's policies," not because of anything the Federal Reserve is doing.

In fact, Hassett thinks the Fed is actively working against the administration. "The Fed has amongst the highest interest rates on Earth right now, and President Trump is frustrated with that," he said. He was quick to clarify this frustration has nothing to do with the Department of Justice's decision to pursue a "criminal indictment" against Fed Chair Jerome Powell.

When asked if the Fed deserves any credit for simply not interfering with positive economic developments, Hassett wasn't having it. Instead, he called for "a little bit more introspection" from central bankers about how inflation spiraled to 9.1% year-over-year in 2022, the highest reading since 1981. "We let inflation get out of control," he said. "It'd be nice to know how that happened, and nice to know that we have a plan to make sure it doesn't happen again."

As proof the administration's approach is working, Hassett pointed to strong factory activity and GDP growth. "We got GDP now north of 5% in the fourth quarter after 2.4% the previous quarter," he said, adding that Trump's policies "are really working."

The Jobs Picture Looks Different

Here's where things get complicated. The latest jobs report from the U.S. Bureau of Labor Statistics shows employers added just 584,000 jobs during all of 2025, a steep decline from 2 million jobs in 2024. It's also the weakest annual wage growth outside of a recession since the early 2000s.

Moody's Analytics Chief Economist Mark Zandi has a theory about what's happening. "This reflects the direct effects of the tariffs on manufacturing, transportation and distribution," he wrote on X Sunday, pointing directly at Trump's trade policies.

The manufacturing sector tells an especially troubling story. Joel Griffith, a Senior Fellow at Advancing American Freedom, noted that manufacturing has shed jobs for eight consecutive months, starting in April when Trump's "Liberation Day" tariffs were first announced. "Trump's tariffs are hammering the manufacturing sector," he wrote on X last week, "the very sector that they were meant to save."

So which narrative is correct? The White House sees a booming economy powered by smart policy. The jobs data suggests tariffs are creating real pain in the sectors they were designed to protect. Both things can be true at once, which is what makes this moment so interesting to watch.

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