Why Trump’s Jobs Report Tweet Is Troubling

Robert Donachie | Capitol Hill and Health Care Reporter

President Donald Trump may have set a dangerous precedent Friday morning when he hinted an hour before the federal jobs report came out that the numbers would be strong.

“Looking forward to seeing the employment numbers at 8:30 this morning,” the president tweeted Friday.

The U.S. gained 223,000 new non-farm employment jobs in April and saw a drop in key unemployment figures, Friday’s job report showed. (RELATED: 223,000 Jobs Added In May)

While the president didn’t tip off the numbers directly, there is a 1985 federal rule stating all employees of the executive branch, who are briefed on data and information prior to its release, are barred from commenting publicly “at least one hour after the official release time.”

“All employees of the executive branch who receive pre-release distribution of information and data estimates as authorized above are responsible for assuring that there is no release prior to the official release time,” according to a 1985 rule. “Except for members of the staff of the agency issuing the principal economic indicator who have been designated by the agency head to provide technical explanations of the data, employees of the executive branch shall not comment publicly on the data until at least one hour after the official release time.”

The president himself is likely exempt from the rule, because he isn’t technically a federal employee.

The definition for federal employee includes “any officer or employee of the executive branch or any independent agency that is not a part of the legislative or judicial branches.” That definition does not include “the president or the vice president.”

Still, there are implications about a president or another cabinet official, like a treasury secretary, tipping off investors about a jobs report. Although the president didn’t disclose any information directly, the implication a statement from the president could move markets is something to take seriously.

Trump, along with a select number of cabinet officials, is briefed on the jobs report the evening before it goes public. That is to say the president and other administration officials had access to the data Thursday evening that, if released, would give investors an upper hand in trading.

The president tweeted Friday morning and almost immediately the yield on 10-year treasury notes rose, spiking higher after the jobs report became available to the public at 8:30 a.m. The Dow Jones Industrial Average, NASDAQ and S&P 500 indexes were all up, respectively, at the opening bell, with the NASDAQ and S&P experiencing consistent, linear gains.

The question then is what happens if the president doesn’t tweet before next month’s jobs report: do investors take the president’s silence as a reason to believe the economy is on a downturn?

There is no doubt comments from a president or an administration official can move markets and move them rather dramatically.

The market reacted quickly to former President Barack Obama’s assertion in March 2009 that short, day-to-day fluctuations in the stock market were not his primary focus but rather investing in a long-term strategy for the economy was a primary goal. One week later, the market hit bottom and investors eyed in on long-run index funds tied to major markets, like the S&P.

There are plenty of other examples — like when former White House chief economic advisor Gary Cohn’s comments that the 2017 GOP tax bill might not be caked into the market as much as investors expected or when Cohn announced he was leaving the administration — as actions are analogous to words.

University of Michigan Economics Professor and New York Times contributor Justin Wolfers pointed out a few implications on Twitter Friday morning, which he noted after The Daily Caller News Foundation reached out to him for comment.

“Lemme bore you by telling you why this tweet was an effing outrage. The jobs numbers are released at 8:30 a.m. The President is traditionally told the numbers the night before but told to play them close to his chest. But at 7:21 a.m., he’s telling us all to tune in. Wonder why,” Wolfers tweeted Friday morning.

“Here’s the problem: Who wants to buy U.S. stocks, if you think there’s a chance that you might be buying from someone who’s selling based on Trump having said something to them on the phone last night? Even if this effect is small, what’s the upside from Trump’s tweet?” Wolfers continued.

“And you can’t put the genie back in the bottle: Next jobs day, if at 7:21 a.m., Trump tweets about Roseanne or some other dumb thing, that’s not the jobs day; markets will infer he doesn’t want to talk about the jobs report. Watch: stocks will fall as a result.”

White House economic council advisor Larry Kudlow he briefed the president about the jobs report Thursday evening and Trump “chose to tweet,” he told reporters Friday.

“I don’t think he gave anything away,” Kudlow added.

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