Peter Navarro Versus The Worst ADP Report In Nine Years

The worst ADP report since 2010 made for a hilarious juxtaposition with Peter Navarro’s Wednesday cable news junket.

I’d be willing to bet right-wing media (and especially right-wing financial media) didn’t bother to point out the discrepancy between Peter’s contention that the “Trump economy” is firing on all cylinders (despite trade jitters) and data showing that, in May, companies added the fewest workers in any month going back more than nine years.

The 27k print represented a truly heinous miss versus consensus, which was looking for 185k. The range was 153k to 226k.

Some of this is down to labor market tightness, but you’d be naive not to think that the smallest gain of the current expansion doesn’t at least suggest that the trade war is weighing on sentiment. Losses were concentrated in the goods-producing sector, where the report showed a 36,000 decline in construction jobs, a 3,000 decline in manufacturing jobs and a 4,000 decline in natural resources and mining. Payrolls at small businesses contracted by the most in nine years.

This comes just days after ISM printed the lowest of the Trump era and amid a veritable collapse in farmer sentiment.

But for notorious trade hawk Peter Navarro (who, as The New Yorker’s Adam Davidson wrote prior to the election, harbors “views on trade and China so radical that, even with his assistance, I was unable to find another economist who fully agrees with them”), the Trump economy is impervious to the trade war he’s been instrumental in perpetuating.

Navarro’s first appearance was on Bloomberg TV, where he immediately took issue with the World Bank, which slashed its growth estimates this week citing trade tensions. “There’s been a tumble in business confidence, a deepening slowdown in global trade and sluggish investment in emerging and developing economies”, David Malpass said Tuesday, adding that “heightened policy uncertainty, including a recent re-escalation of trade tensions between major economies, has been accompanied by a deceleration in global investment and a decline in confidence.”

In the interest of staying on Navarro, we’ll just skip over the irony of that assessment coming from Malpass, who was nominated for the position by Trump.

Peter didn’t want to hear anything about the World Bank, so, Bloomberg proceeded to cite Ted Cruz instead. Navarro, responding, said “Congress has failed as an institution”. Here’s the clip:

As ever, this is dangerous territory. Navarro is parroting Trump’s line about congressional “failure” being an excuse for executive overreach. On the surface, that’s not a terribly dubious claim – if Congress can’t get something that needs doing done, well then the president may need to do it himself. However, you’re encouraged to note that the crisis at the border has worsened materially under Trump. Indeed, some would argue he’s intentionally created an emergency where there was none in order to justify the border wall. Of course, his frustration with the situation suggests that if he did intentionally make the situation worse, it’s now spiraling beyond his control, so he’s wielding tariffs as a weapon and thereby blurring the line between trade/economic policy and national security.

Read more on why the ‘national security’ excuse is dangerous

Just minutes after his comments to Bloomberg, Navarro’s vampire-like visage materialized on CNN. There, he was asked explicitly if he would “grant the fact” that the administration is lying to the American public when it comes to who “pays” the tariffs. Jim Sciutto should have known better – this is Peter Navarro we’re talking about after all. Here’s the clip:

To be clear, the reason Sciutto was quoting the Koch brothers and Ted Cruz isn’t because he wanted to, but rather, to point out to Peter that what the administration is doing isn’t in any way, shape or form consistent with Republican orthodoxy, something Navarro is fully apprised of. On Tuesday, in a letter to top GOP lawmakers, the Koch-backed Americans for Prosperity called Trump’s prospective Mexico tariffs “the largest tax hike in modern history”.

Ironically, markets actually got a boost from Peter’s CNN chat because, at one point, he said the tariffs on Mexico might not be necessary.

Finally, for giggles, here is the moment when, right in the middle of Navarro justifying the use of economic coercion to bully Mexico into taking draconian action to curb migrant flows, the worst ADP print in nearly a decade comes flashing red across the bottom of the screen.

During his appearance on CNN, Navarro weighed in on the relative merits of using tariffs to try and curb the incentives he described to Bloomberg.

“This is not unreasonable”, Navarro said. “[Threatening tariffs] as a way to compel Mexico to internalize illegal immigration is a brilliant strategic move.”

Donald Trump: “Brilliant” strategist.