One Year, Two Jobs Reports: How Trump And Biden Drove Job Growth In Very Different Ways
A year apart, President Donald Trump and former President Joe Biden both touted September job growth — but the source of that growth couldn’t be more different. Under Trump, the federal workforce shrank, while under Biden, it expanded.Thursday’s jobs report showed an overall increase of 119,000 jobs, with the bulk coming from the private sector.“The job growth was driven almost entirely by private-sector job gains,” stated the White House in a press release. Health care and construction industries led the way — adding 43,000 and 19,000 jobs, respectively. And while the private sector grew, the public sector shrank.“Federal government employment continued to decline in September and is down 97,000 since reaching a peak in January,” the report showed. That figure may even understate the true contraction, as workers on severance are still counted as employed by the Bureau of Labor Statistics.On the other hand, Biden’s September 2024 report told a different story. “Employment in government continued its upward trend in September,” the report stated. Under Biden, government jobs averaged a monthly gain of 45,000.When Trump took office, federal jobs were at a peak. He implemented a federal hiring freeze initially scheduled to end October 15, which was later extended indefinitely. Once the freeze expires, federal agencies can hire no more than one employee for every four employees who depart from federal service. The freeze makes exceptions for jobs related to immigration, law enforcement, and public safety. Trump framed the reduction as a correction of the previous administration’s growth. The hiring freeze fact sheet explains, “In the last two years of the Biden administration, the government was directly responsible for the creation of more than 1 in every 4 jobs.”Campaigning on eliminating waste, the Trump administration says the freeze is necessary to address the “billions of dollars wasted each year on duplicative programs and frivolous expenditures that fail to align with American values or address the needs of the American people.”Not stopping at limiting new hires, the Office of Personnel Management estimates that by the end of the year, more than 300,000 federal employees will have left or lost their jobs. The Trump administration says it hopes many of those workers transition to private-sector positions.The strength of private-sector job growth complicates the Federal Reserve’s path. CNBC’s Steve Liesman said the report “bolsters the case of the hawks on the FOMC who have said they do not see serious deterioration in the labor market … a robust report.”According to Fed Chair Jerome Powell, without a weakening labor market, the case for a December rate cut becomes much harder.At November’s Federal Open Market Committee meeting, Powell described a difficult balance: a tight labor market alongside higher-than-desired inflation. Ultimately, the Fed decided on a rate cut to avoid further disruption to employment.“We’re in a difficult situation,” Powell said at the National Association for Business Economics. “If we move too quickly, then we may leave the inflation job unfinished. If we move too slowly, there may be painful losses in the employment market.”Trump Economic Advisor Kevin Hassett says he expects the government shutdown to knock 1.5% off of fourth quarter GDP, making now “a very bad time” to pause rate cuts despite a strengthening labor market.
