Trump's Manipulation of the Jobs Report, Lee Jae-myung's Manipulation of the "Cold Wave" Causes Job Loss
US President Trump promoted the manipulation of the jobs report, and President Lee Jae-myung manipulated public relations by blaming the "cold wave" for the job loss.
President Lee Jae-myung stated at a Cabinet meeting on the 10th, "While job security is important, alternatives to employment flexibility must be developed to improve the overall quality of jobs." He said, “We need to increase the wages of irregular workers so that they do not feel insecure when they quit their jobs, and we need to give them confidence that they have a way to survive by providing a strong safety net even if they are laid off,” and revealed a “strategy of shifting responsibility to employers” regarding the government’s responsibility for the worsening employment situation through the policy of “guaranteeing layoffs for regular workers and increasing wages for irregular workers.”
Government data showed that January employment increased by 108,000 compared to the same month last year, the lowest figure in 13 months since December 2024 (-52,000). The government explained on the 11th that this was "due to the reduced activity of the elderly due to the cold wave."
The number of unemployed in January reached 1.211 million, an increase of 128,000 from a year earlier, and the unemployment rate rose 0.4 percentage points to 4.1%. This is the highest level in four years, since January 2022 (4.1%). In particular, the January employment decline was driven by a surge in the number of "resting" individuals among the economically inactive population, by 110,000 to 2.784 million, the highest January figure since statistics began being compiled in 2003. This represents the worst employment situation.
The number of employed persons decreased by 15,000 in January 2021 (-141,000), the largest increase in five years, due to the acceleration of youth unemployment and the increase of 141,000 among the elderly. The government attributed this to the "cold wave."
The Lee Jae-myung administration attributed this stark contrast to the five-year monthly increase of 200,000-400,000, which was driven by the government's fiscal stimulus-dependent employment strategy, which led to a concentrated increase among the elderly population.
Bin Hyun-joon, Director of the Social Statistics Bureau at the Data Agency, told reporters that day, "Last month's temperatures and the cold wave have had a negative impact on the activity level of the elderly." Korean media outlets reported on the same day, "The number of employed people has increased by the smallest amount in over a year," adding, "This suggests that the youth unemployment crisis has accelerated, and even senior jobs have been decimated by the cold snap."
Senior White House officials have begun to downplay the jobs report scheduled for release on the 11th, insisting that the U.S. economy remains strong despite the data suggesting a potential hiring slowdown.
The NYT reported on the 10th that the Trump administration's concern stems from the Bureau of Labor Statistics' next monthly update, which is due in January and will provide a more formal look at the hiring situation and a revised overview of the U.S. employment situation over the past year. A dismal jobs report could be politically damaging for President Trump, complicating his efforts to convince skeptical voters that his policies have brought meaningful improvements to the economy.
To this end, his top aides have been ramping up their rhetoric to argue that the low January jobs numbers don't reflect the full picture of the labor market early this year. Peter Navarro, the president's top trade adviser, highlighted the president's mass deportations in a Fox Business interview on the 10th, saying, "Expectations for the monthly jobs numbers should be significantly lowered," and that "the U.S. economy has changed significantly under President Trump."
The New York Times reported that this, "He said, has reduced the number of new jobs the labor market needs to create and maintain to achieve 'steady state.'"
Navarro also warned that he "doesn't expect a weak number" when the BLS releases its numbers on the 11th, and that he was simply advertising the general hiring figures, saying, "If we see less than 100,000, we're not going to get angry."
Economists had already forecast a "decreased hiring" in January, expecting employers to add about 69,000 jobs.
Generally, experts have pointed to the president's immigration policies as reducing the number of new jobs needed each month to maintain a stable unemployment rate.
In a report dated August 28th of last year, the St. Louis Fed published a report titled, “Lower Immigration Outlook Lowers Breakeven Job Growth Estimates,” in which Commissioner Alexander Vick stated, “In April of this year, St. Louis Fed economist Victoria Gregory and I presented our estimate of the breakeven job growth rate, which is the number of jobs that must be added each month to stabilize the unemployment rate.”
He continued, “Using the January Congressional Budget Office (CBO) projections, we estimated that the U.S. economy would need to add more than 150,000 jobs per month to maintain a stable unemployment rate.”
The report continued, “Since then, new immigration projections have dramatically changed the situation,” and predicted a decline in employment, saying, “In conclusion: With projected immigration for 2025 being much lower, I estimate that the breakeven job growth rate has now fallen to between 32,000 and 82,000 jobs per month.”
The report, subtitled "Why This Big Change?", pointed to the Trump administration's "immigration crackdown and deportation policies," stating, "The primary driver is immigration, a significant source of labor in the U.S. economy." As explained in the original article, break-even point employment growth is heavily dependent on population growth, and net immigration, while important, is the most difficult to predict.
Kevin Hassett, President Trump's top trade adviser, also pointed to immigration restrictions on the 9th as one of the few factors expected to suppress January hiring.
He preemptively predicted a potential hiring decline during a CNBC appearance, stating, "Deportations, the widespread adoption of artificial intelligence, and overall economic growth could result in 'slightly fewer jobs.'"
The New York Times criticized Hassett for altering "employment decline" to "AI productivity gains," saying, "Advisor Hassett has long argued that advances in artificial intelligence have boosted worker productivity, likening this boom to the emergence of the modern internet." "He reiterated this view this week, arguing that productivity gains have fueled economic growth even without massive hiring by employers."
Hassett stated on the broadcast, "Don't panic if you see a series of lower-than-usual numbers. Population growth is slowing, while productivity growth is surging." He explained that this was an "unusual situation."
The New York Times noted, "The issue of hiring, particularly regarding employment declines, is a sensitive one for President Trump. The president has previously questioned the reliability of unfavorable employment data, and in August, he fired the Senate-confirmed director of the Bureau of Labor Statistics for revising past estimates."
The United States will hold midterm elections in November, and the Lee Jae-myung administration will hold local elections in June. The National Data Agency's "January Employment Trends" report showed 27,986,000 employed people aged 15 and older, a mere 108,000 increase from the same month last year and a smaller increase than the previous month. However, President Lee had previously announced that the "strong economic recovery will continue."
The employment decline was the smallest in 13 months since December 2024 (-52,000), indicating a continued economic downturn.
By industry, the professional, scientific, and technological services sector, where the government has invested heavily, saw a decline of 90,000 to 80,000 jobs. This is the largest decline since the 2013 industrial classification reform, and the economic downturn appears to be the root cause of the recession.
The declines in employment expanded across production sites: agriculture, forestry, and fisheries (-107,000), public administration and social security (-40,001), manufacturing (-23,000), and construction (-20,000). Increases were limited to health and social services (185,000), transportation and warehousing (71,000), and arts, sports, and leisure services (45,000), industries that receive significant government support.
The St. Louis Fed report stated, "The low break-even employment growth rate has a significant impact on the interpretation of monthly employment reports," and "The low threshold implies that even small job gains could maintain or lower the unemployment rate if immigration remains low. If the economy only needs to add 50,000 jobs per month to stabilize the unemployment rate, a monthly increase of 75,000 or 100,000 would be significant positive news."
The report concluded, "We estimate that the current break-even employment growth rate has fallen to between 32,000 and 82,000 jobs per month." This suggests that a "monthly increase of 75,000 or 100,000 jobs" would be considered "normal," and a report released in advance indicated that a drop well below this would be a "worsening employment contraction."
Director Bin, who presented the data for the Lee Jae-myung administration, told reporters, "There have been technological adjustments in the process of significant growth since 2023." He added, "We believe that the advancement of artificial intelligence (AI) in professional services has slowed the hiring of new employees."
He then released an interpretation of the decline in professional and technical employment, stating, "This is due to a decrease in trainee hiring in professional occupations such as lawyers and accountants."
The Fed report stated in its employment report, "As always, the break-even employment growth rate is not a glass marble, but a useful benchmark." "While job growth may fall short of the break-even rate in any given month, the unemployment rate can remain stable or even decline." However, understanding how this benchmark has shifted allows for a better interpretation of whether monthly job growth is truly strong or weak," he said.
The Lee Jae-myung administration's Consumer Price Index (CPI) excludes "ownership costs," the largest component of the US CPI, thereby excluding the surge in housing costs from inflation and understating the figures by approximately 30%. Furthermore, it reinforces a lower interest rate regime than the US, thereby abusing the policy of increasing housing prices and expanding the money supply.
Statistics Korea (National Data Agency) classified housing as a "speculative good" and excluded it from the consumer price index from the outset. It also used it as a means of increasing taxes to compensate for the abuse of heavy taxation, excluding it from money supply policies, and has maintained a policy of wage control for urban workers, supporting a strategy of rapid economic growth driven by low interest rates. Furthermore, it has promoted the government's "strategic wealth concentration" system, encouraging those with large assets to accumulate even greater wealth through real estate.
See <Statistics Korea: 'Housing is a Speculative Good' Consumer Price Index Excluded, Comprehensive Real Estate Tax Offensive, December 24, 2021>
<Inflation Rising, Downward Economic Growth Rate, Side Effects of V-Rebound, December 2, 2021>
<US Rent Rise Prolongs Out-of-Control Inflation; Korea Excludes Homeownership Costs from Inflation, February 14, 2024>
<Homeownership Costs, the Main Cause of Inflation, Excluded from Korea's Price Index, Intensifying Crisis, July 13, 2022>
<New Growth Monetary Supply Expansion Causes High Prices and Polarization Side Effects, September 3, 2020>