Trump should absolutely not raise prices after this jobs report.

Friday's job report was not good. According to the Bureau of Labor Statistics, employers added only 75,000 workers to their payrolls in May; Since March, the economy has generated about 150,000 new jobs a month. It's a lot less than what was happening at the beginning of this year.

This downward trend is not necessarily a reason to worry alone. For example, job growth may slow down if we approach full employment – the point at which the vast majority of Americans who want a job have one, and there are simply not many people who need to be recruited by enterprises. But if that happened now, you would also expect an increase in wage growth. As Harvard economist Jason Furman points out, this is not the case. In fact, average wage growth seems to be slowing down.

These trends could be only temporary. the jobs report is inconsistent and the trends seen over the past few months can still reverse. But they are confusingbecause the most obvious explanation of what might happen is that the White House has scared businesses in recent months by escalating its trade war with China. (The bond markets certainly suggest pessimism among investors.) Trump's rates could also directly cool the economy slightly, since they are, after all, a tax on Americans.

In the meantime, the Trump administration is about to impose tariffs on imports from Mexico unless the Mexican government can convince our president to prevent migrants from reaching the US border. . Mexico has already begun to crack down in response. However, as of Thursday night, the administration has announced plans to continue with 5% rates starting Monday, which could reach 25% from now. (Trump could still decide to suspend this plan over the weekend.)

Using the tariffs to punish immigration from our southern neighbor was already a silly ploy before the publication of this month's employment report. It will almost certainly hurt the American auto industry, which depends on its ability to move parts and cars across the supply chain to the United States, Canada and Mexico. . This will equate to another US household tax. And it is unclear exactly what the Mexican government can really do to stem the flow of immigrants in the long run, given the limited resources available to it.

But with the economy seeming to weaken, the idea of ​​freezing a tariff on everything the United States buys in Mexico is even worse. If our president had any sense, he would have no chance of making this plan a reality. Unfortunately, we are not so lucky.