Commerce Secretary Howard Lutnick on Wednesday denied that the Trump administration’s tariff policies were to blame after a new report showed a surprise drop in private payrolls in November.
Instead, Lutnick argued on CNBC’s “Squawk on the Street” that the government shutdown temporarily slowed small-business activity. He added that the federal efforts to enact mass deportations of undocumented immigrants also suppressed jobs numbers.
“No, no, it’s not tariffs,” Lutnick said when asked whether President Donald Trump’s import duties explained Wednesday morning’s report from ADP, which revealed an unexpected 32,000-worker drop in the labor market.
That decline, a sharp turnabout from October, was led by businesses with fewer than 50 workers, which saw their payroll numbers sink by 120,000. Larger businesses, meanwhile, reported a net gain of 90,000 workers.
“Remember, you had the Democratic shutdown, right? And what do you think happens to small business? The people who do business with the U.S. government, they know they’re not getting paid, so they sort of slow down their projects,” Lutnick said.
“So you saw a little bit, even, of construction small business down. So the Democratic shutdown hurt the numbers,” he said.
“And then, remember, as you deport people, that’s going to suppress private job numbers of small businesses,” Lutnick added.
But the Cabinet secretary assured that those figures will “rebalance and they’ll regrow,” claiming “this is just a near-term event” and that “next year, the numbers are going to be fantastic.”
He also reiterated his prior prediction that U.S. GDP will rise above 4% in 2026.
Lutnick’s defense of Trump’s protectionist agenda came as corporate executives and economic forecasters have started to warn that his alternately aggressive and unpredictable tariffs could spur domestic job cuts in the coming year.
“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” ADP’s chief economist, Nela Richardson, said in a press release accompanying the private payrolls report.
“And while November’s slowdown was broad-based, it was led by a pullback among small businesses,” Richardson said.
