With the restraint of a 9-year-old in a candy store, the President of the United States took to Twitter this morning to tease the impending May jobs report—and may have violated federal law in the process.
At 7:21AM EST, after months of relatively unremarkable jobs reports, Trump tweeted that he was “looking forward” to seeing last month’s employment numbers.
Looking forward to seeing the employment numbers at 8:30 this morning.
— Donald J. Trump (@realDonaldTrump) June 1, 2018
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Its official release at 8:30AM EST revealed that it was indeed much stronger than expected: 223,000 new jobs were created and the unemployment rate fell to an 18-year low of 3.8 percent. Not impressive, however, is the fact that Trump’s tweet may violate federal regulations stipulating that “employees of the Executive Branch shall not comment publicly on the data until at least one hour after the official release time.”
All employees of the Executive Branch who receive prerelease distribution of information and data estimates as authorized above are responsible for assuring that there is no release prior to the official release time. 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.
Trump, however, was given the jobs report in advance, a point confirmed by White House Press Secretary Sarah Huckabee Sanders and Director of the National Economic Council Larry Kudlow.
I just asked Sarah Sanders if it was appropriate for President Trump to tweet about the jobs report before release this morning. She said it was, because “he didn’t put the numbers out.” She also confirmed that the President was briefed on the number last night.
— Eamon Javers (@EamonJavers) June 1, 2018
Trump hinted this a.m. there’d be good news in the jobless report.
Larry Kudlow admits he told Trump last night.
"I tracked him down on Air Force One. I wanted him to know the numbers,” Kudlow said on CNBC today.
"He has the right to know as the commander in chief." https://t.co/zbCjDZnpHL
— Jennifer Jacobs (@JenniferJJacobs) June 1, 2018
In other words, by virtue of saying anything at all (which he has never done) ahead of perhaps the strongest jobs report of his presidency, investors were able to infer that it would be strong.
And they did.
This is…unusual. Trump tweeted about jobs day at 7:21am EST, suggesting he knew the numbers would be surprisingly good. https://t.co/k35UPSEPI6 That's how the market took it anyway, with U.S. yields taking a leg higher right after. Raises a lot of questions. pic.twitter.com/TcN9oLNYqU
— Lisa Abramowicz (@lisaabramowicz1) June 1, 2018
The move is especially problematic because, moving forward, should Trump fail to tease the report, investors could presumably extrapolate that the report isn’t strong, and react accordingly prior to its actual release.
What happens if next month, Trump DOESN'T tweet anything ahead of the jobs release? Do we all short-sell? This is why the government doesn't tip its hand in any way.
— (((JonathanWeisman))) (@jonathanweisman) June 1, 2018
Looking to the president for clues, those who understand the market would now be able to use this illegal tactic to buy or sell, which would certainly help any of Trump’s rich friends make some quick cash.
But, of course, he’s the populist president of the forgotten man, the little guy. How could I forget?