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Data: Bureau of Labor Statistics; Chart: Axios Visuals

The long jobs boom, a pillar of confidence in the U.S. economy, has hit what economists say is a self-inflicted hiccup: President's Trump's multiple trade wars.

What to watch: As Americans have done for a decade and longer, they — along with Trump himself, running for re-election next year — will likely rely on the Fed to come to the rescue.

Driving the news: In numbers released Friday, the Bureau of Labor Statistics said the economy created just 75,000 jobs last month, fewer than the 80,000-100,000 needed to absorb new entrants to the work force, like high school and college graduates.

  • In addition, the BLS revised down its March and April figures by 75,000 jobs — meaning that the May figures were a wash. The unemployment rate held at 3.6% — the lowest in almost a half-century — but it still was as though no jobs were created last month at all.

The big picture: Economists say the new figures, combined with other indications of economic deterioration, suggest that the economy is downshifting to slower growth. Beyond the impact on ordinary Americans and businesses, there are political ramifications:

  • Analysts blame Trump: "Whatever stress there is [to economic conditions] is largely man-made, and the man in question has an office on Pennsylvania Ave.," said Scott Clemons, chief investment strategist at Brown Brothers Harriman.
  • Despite the chaos, they think Trump is likely to keep up his trade fight through the November 2020 election, because it plays to his base. So to make sure there is no recession come Election Day next year, they think he will turn to the Fed to lower interest rates and stimulate the economy.
  • "There is significant and growing risk a recession will start in the second half of 2020 just in time for the election," said Joseph Brusuelas, chief economist at RSM. "One should anticipate a new White House offensive against the Fed to be imminent."

As we reported Thursday, the tension with China and Mexico is playing havoc with the U.S. and global economy. A report this week, for instance, said U.S. manufacturing for May was the weakest since October 2016 — before Trump won office. And in another report, LinkedIn said that overall hiring actually dropped last month by 0.9% year-on-year.

Against these winds, Wall Street has decided it is time for a buying spree: All three major U.S. indexes rose on Friday by more than 1%. What's that all about? At the FT, Gillian Tett writes that investors are convinced that, whether it is because of pressure from Trump or not, "the Fed will do whatever is needed to avoid a downturn."

Thought bubble from Axios markets editor Dion Rabouin: "Lost in much of the discussion about the jobs report and the Fed is the fact that globally central banks are still easing policy. That is, they continue pumping hundreds of billions of dollars into the economy. This has been going on for a decade. At some point, someone is going to have to raise the possibility that more easy money in the banking system may not be achieving the desired result."

What is that desired result: "A healthy economy that does not require stimulus and can stand on its own."

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