Jobs drop due to shutdown, deportations, not tariffs: Lutnick

Trade Secretary Howard Lutnick On Wednesday, claims that the Trump administration’s tariff policies were to blame were refuted after a new report showed a surprise decline in private employment in November.

Instead, Lutnick argued on CNBC’s “Squawk on the Street” that the government shutdown temporarily slowed small business activity. Federal efforts to legalize mass deportations of undocumented immigrants are also weighing on job numbers, he added.

“No, no, not tariffs,” Lutnick said when asked if President Donald Trump would announce import tariffs Wednesday morning. Report from ADPThis revealed an unexpected drop of 32,000 workers in the labor market.

This decline, a sharp reversal since October, was driven by businesses with fewer than 50 employees, where payroll figures fell by 120,000. Meanwhile, larger businesses reported net gains of 90,000 workers.

“Remember, you had the shutdown in the Democratic Party, right? So what do you think is going to happen to small businesses? People who do business with the U.S. government, they know they’re not getting paid, so they’re kind of slowing down their projects,” Lutnick said.

“So you’ve seen even small businesses in the construction industry collapse a little bit. So the Democratic shutdown hurt the numbers,” he said.

“And remember, when you deport people, it also reduces private business numbers for small businesses,” Lutnick added.

But the Cabinet secretary assured that these figures will “rebalance and grow again”, claiming that “this is just a short-term event” and that “the figures next year will be spectacular”.

He also reiterated his previous prediction that US GDP would rise above 4% in 2026.

Lutnick’s defense of Trump’s protectionist agenda comes as business executives and economic forecasters have begun warning that Trump’s alternately aggressive and unpredictable tariffs could trigger domestic job cuts next year.

“Hiring has been volatile lately as employers counter cautious consumers and an uncertain macroeconomic environment,” ADP chief economist Nela Richardson said in a press release accompanying the private employment report. he said.

“The slowdown in November, although broad-based, was driven by the decline in small businesses,” Richardson said.