SCOTT SIMON, HOST:
The first jobs numbers since the Trump administration fired the labor statistics chief are...
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KEVIN HASSETT: Certainly, a little bit of a disappointment right now.
SIMON: As National Economic Council director Kevin Hassett told CNBC yesterday, but he went on to say he expects the jobs gains of just 22,000 last month to be revised up, that it's important to look at what he called the economy's entire portfolio. Do we have a sense now, eight months into the Trump second term, what the administration wants that portfolio to look like? Greg Ip is chief economics commentator for The Wall Street Journal and joins us now. Thanks so much for being with us.
GREG IP: Great to be here, Scott.
SIMON: Just 22,000 jobs in August and a revision to June's numbers that show a loss of 13,000, rather than the gain initially reported. What stands out to you in this report?
IP: It's one of the weakest paces of job growth since 2020 at the depths of the pandemic. What's interesting is that while we have seen the unemployment rate go up at the same time, it hasn't gone up very much. So it probably tells us that while the demand for workers is very low, the supply is also low, which probably has something to do with the fact that the administration has really clamped down on immigration and stepped up deportations. So I think that we have a sort of uneasy equilibrium in the labor market, something that doesn't look super healthy but also does not look like a recession.
SIMON: Do you have confidence in these numbers?
IP: Well, I personally do. I haven't seen anything in the particular numbers that seems out of the ordinary or inconsistent with the way these numbers have been produced in the past.
SIMON: Senate Minority Leader Schumer says that Democrats are going to force a vote on the president's import tariffs. Of course, we've seen a number of court losses that the administration has had regarding these tariffs. Where do you see that Trump tariff policy headed?
IP: Well, I think the president's been pretty clear all along that he wants tariffs across the board to be higher, and he wants them to stay that way. And he has done this entirely using executive branch authorities. And we've already seen a couple of courts say that Trump has, in fact, gone beyond what Congress intended him to do. So we'll kind of have to wait for the Supreme Court to weigh in in the next month or two about whether, in fact, the president was allowed to raise tariffs as much as he did. And as a result, we'll probably continue to see some uncertainty weighing on the economy. But make no mistake, this is kind of an existential issue for Trump. There's nothing that has ever been more important to him than having high tariffs. And there are quite a few different laws on the books that he can, without too much pushback, use to achieve the higher levels of protection that he wants.
SIMON: Of course, central bank independence is also a question. You have a nominee for short-term Fed governorship, said Thursday that he wouldn't quit his White House job if he's confirmed. The Justice Department's announced a probe of Fed governor Lisa Cook. She's challenging the legality of her dismissal. All the attacks on Chair Jerome Powell. Are investors as alarmed as a lot of analysts?
IP: No, investors are surprisingly sanguine about the very real threats to independence of the Federal Reserve. I'm personally not that surprised by that because what Trump wants the Fed to do, and what it has not done yet, is to lower interest rates a lot. And to be honest, investors like low interest rates. It makes stocks look more attractive. It gooses the economy. What economists will tell you, though, is that a Federal Reserve that is not independent, that basically does what the president wants it to do, will probably keep interest rates too low, and we'll eventually have an inflation problem. But that's some years in the distance, and it's not the sort of thing investors are well-equipped to really incorporate into their decisions today.
SIMON: Let me ask you about the government having now an ownership stake in Intel and also a revenue-sharing arrangement with Nvidia. Do you think the government owning stake in private companies is a good idea?
IP: Well, let's step back about whether it's a good idea or a bad idea. During World War II, the government demanded that private companies produce material for the war effort. During the global financial crisis, the federal government stepped in and took stakes in General Motors and banks to prevent them from failing because that would've had catastrophic effects on the entire economy. And even today, with healthy companies, you can make a case that there are certain technologies like semiconductors that are so important that the government needs to get involved so that we do not fall behind China. So there's a little bit of that in what you see the president doing with respect to taking a stake in Intel or imposing a fee on AMD and Nvidia to sell chips to China.
What I think is missing is a clear strategy or even a statutory basis for what he's doing. It's not been made clear how demanding a stake in Intel will make Intel more competitive or better able to produce the chips that we need to compete with China. And to some extent, this seems to mostly reflect Trump's own assessment of where he has leverage. And I suppose that's why some folks see this particular direction that the country is going as maybe taking on some of the similarities of state capitalism that we see in countries like China, Russia, France or Brazil. Certainly not the historical model that the United States is used to.
SIMON: Wall Street Journal and chief economics commentator Greg Ip. Thanks so much.
IP: Thanks for having me. Transcript provided by NPR, Copyright NPR.
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