Trump Slams Fed After Historic Jobs Revision—Is It 'Too Late' To Fix It?

The stunning 911,000-job downward revision from the Bureau of Labor Statistics has prompted President Donald Trump to once again slam the Federal Reserve as dangerously behind the curve—questioning whether it's already too late to fix the damage.

In a post on Truth Social on Tuesday, Trump blamed the central bank for missing inflation and labor trends early in the post-COVID recovery.

"If the Fed had followed what we published, they would have raised rates in early 2021," Trump said.

"The entire organization is broken. It needs to be fixed. They need to use modern sources of information."

Trump slammed Fed Chair Jerome Powell's dual-mandate framework—targeting both inflation and employment—as outdated, saying it's "too low, too rigid," and based on "data that's years delayed."

Trump also rejected billionaire Ken Griffin's defense of Fed independence, saying, "We think incompetence is more important than to defend theoretical independence."

Meanwhile, economists and investors are also scrambling to reassess the health of the U.S. labor market—and what it means for Federal Reserve policy.

But as the dust settles, two sharply different interpretations are emerging.

‘A Recipe For Disaster’

Venture capitalist and Social Capital CEO Chamath Palihapitiya backed Trump's criticism of the Federal Reserve.

“We're now firmly behind the curve and in the ‘too late' part of the cycle," Palihapitiya said on social media X.

He added that the Fed "doesn't really have a plan beyond an initial cut," calling for a total rethink of how the U.S. sets monetary policy.

He called for a complete overhaul of how U.S. monetary policy is set, urging a shift toward real-time, transparently published data.

In a separate post, he described the Fed as "woefully ill-equipped to set monetary policy in an economy as dynamic and complicated as the U.S. in 2025," adding that its reliance on "useless and wrong" data is a "recipe for disaster."

Just two days before the BLS revisions, Palihapitiya drew a sharp comparison to 2008. "The most egregious example was going into the GFC—they completely blew the jobs picture, stayed pat, and then had to scramble. Here we are again."

He argued that the BLS data is "too sterile and slow" to reflect a rapidly changing labor market, and warned that the Fed's outdated tools are leading to preventable policy mistakes.

‘Topline Economy Has Done So Well’

Peter Williams, analyst at 22V Research, sees the data through a different lens.

While he highlighted the scale of the payroll revision—calling it "much more pessimistic"—he also indicated that it doesn't fundamentally alter the broader picture of a resilient, albeit evolving, U.S. economy.

In a note shared Tuesday, he stated that most measures of labor market slack—such as jobless claims, spending data, and corporate earnings—were largely stable during the same time frame that the payroll data was overstated.

"It's important to remember what these revisions do not change: the household survey, tax withholding, jobless claims, or what corporations are reporting," Williams said.

"The topline economy has done well despite all the shocks," he added.

In his view, the payroll revisions reflect sector-specific realignments—particularly in wholesale trade, tech, and white-collar services—rather than systemic labor market weakness.

The most substantial cuts were in leisure and hospitality, retail, and professional services, all sectors that had seen overheated hiring during and after the pandemic.

Wall Street Notches Record Highs Again

Despite all the noise surrounding the Fed and the state of the economy, Wall Street showed no signs of concern.

The Dow Jones Industrial Average – as tracked by the SPDR Dow Jones Industrial Average DIA – climbed 0.5% to close at a record 45,740 points.

The S&P 500 – tracked by the Vanguard S&P 500 ETF VOO – rose 0.24% to finish at 6,513 points, also marking a new all-time high. Meanwhile, the Nasdaq 100 – as replicated by the Invesco QQQ Trust, Series 1 QQQ – added 0.4%, ending the day at 23,850 points—underscoring just how resilient the market remains in the face of mounting policy uncertainty.

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Photo: Joey Sussman from Shutterstock