Why it matters: Trump's tweet may have disrupted the market
Friday's report on the jobs market was positive — the U.S. added 223,000 jobs in May (up from 164,000 jobs added in April) and the unemployment rate dropped to 3.8%.
Yes, but: We knew good news was coming before the report came out because of a tweet from President Trump — and that may have impacted the market. Axios' Steve LeVine points out the tweet (seen below) sent an indicator of good news coming down the pipeline, leading to a surge of market activity before the official report was released.
Why it matters: Trump may have violated a major 1985 law stating employees from the executive branch, who receive "prerelease distribution of information and data estimates," are responsible in ensuring that information isn't revealed before the report's official release.
- Trump did tip off traders with his tweet.
- Of note: No one is accusing Trump of giving anyone the news privately so they could trade on it early. He is accused solely of the 1985 violation.
But the market did react to his tweet, according to Bloomberg's Lisa Abramowicz:
This isn't the first time the administration has done something like this. Former Press Secretary Sean Spicer released jobs numbers prematurely for the first report of the Trump administration in 2017 — as the LA Times pointed out, 22 minutes after the report was released (which is before the 1-hour waiting period required by the law).
Yes, but: Even with good jobs news, interest rates could still be on the rise. LeVine says economists say rising wages will prod the Fed to accelerate its steady increase in interest rates. When interest rates go up, that can act as a break on the economy, but also raise the cost of major consumer purchases, like for cars and houses.
Mark Zandi, chief economist at Moody's Analytics, tells Axios:
"Wage pressures are developing, and inflation will follow later this year and next. The Fed will have no choice but to raise interest rates more quickly."
Editor's note: This article has been updated with further information.