President Donald Trump has spent 20 months promising that America was on the cusp of an economic boom. But Friday’s surprisingly positive jobs report ultimately provoked frustration from Trump.

The August job numbers might have been a welcome break from after months of sluggish hiring and concerns about inflation that have been weighing on Trump and his party two months from Election Day. But speaking from the Oval Office, Trump instead launched into a grievance session about inflation and interest rates. His anger was aimed at the financial markets, the Federal Reserve and U.S. trade partners. He objected to the commonly accepted notion in economics that the surprise gain of 162,000 jobs in August could contribute to inflationary pressures.

“Success does not cause inflation. Stupidity causes inflation,” Trump vented in the Oval Office, as he declared it “crazy” that the stock markets fell Friday on inflation concerns.

The combination over his second term of a drop-off in hiring and higher prices has dogged Trump and his pledge to instantly unleash historic levels of growth. “When I win the election, we will immediately begin a brand new Trump economic boom,” Trump said at an August 2024 rally in North Carolina. But so far, the economy has grown at roughly 2% annually, slower than the gains during the Biden administration.

Trump blamed his inability to deliver stronger growth on higher interest rates for U.S. government debt, saying on social media that America could retaliate by stopping trade with foreign countries. Rates have been climbing in response to persistently high inflation fueled by Trump’s tariffs and oil shortages from the Iran war. The national debt has now crossed the daunting threshold of $40 trillion and rates on the 10-year U.S. Treasury note on Friday rose to 4.79%.

Trump has lost some of his credibility on the economy

As the promised growth has yet to materialize, the president has lost some of the public’s trust in his ability to steer the world’s largest economy. His own policies have enabled, in part, the inflation and high interest rates that he wishes to blame on others.

“The administration’s credibility on growth, inflation, rates, debt and deficit dynamics have taken a hit given the outsized predictions that are not aligned with economic reality,” said Joe Brusuelas, chief economist at the consultancy RSM US.

If the Fed did as Trump wanted and cut its benchmark rate so that more money could flow into the U.S. economy, the potential influx of cash could make inflation even worse and only add to his political and economic headaches.

But the president disputed this foundational concept in monetary policy. He said Friday that gross domestic product would grow at “12, 13, 14, 15%” if the rates were lower as he seemed to shrug off the inflation risks.

“We could have a GDP that would break every single record,” Trump said.

The president’s approval rating on the economy was a lowly 32% in the middle of the summer, according to polling by The Associated Press-NORC Center for Public Affairs Research. When Republicans were last facing midterm voters in 2018 under Trump, his economic approval rating was 50%.

Trump’s threat to cut off foreign trade could endanger growth, further hurting his ratings. His recent levying of tariffs against Canada have become problems for Republicans in the Maine and Michigan Senate races.

Trump aides see a brighter future because of AI, tariffs and tax cuts

Trump officials say their policies are working as intended. They say the development of artificial intelligence will lead to more productivity to boost growth. They say that last year’s tariffs should ultimately bring more factory work to America, while Trump’s tax cuts will create more business investment and his administration’s efforts to identify fraud will create savings for taxpayers.

“I expect higher growth,” said Christopher Phelan, chairman of the White House Council of Economic Advisers. “We’re doing stuff to make good things happen.”

Phelan said recent job gains have been about two times larger than what’s needed to match population growth. He considers it as entirely possible that productivity gains could push up overall growth for the next several years, even as he acknowledged that growth alone might not be enough to solve all of the country’s financial challenges.

Because the costs of Social Security and Medicare are rising faster than revenues, growth alone is unlikely to meaningfully reduce budget deficits.

Growth is not enough to fix budget deficits

If U.S. economic growth could exceed 3% growth annually for the next decade, that would only be enough to stabilize the government’s already high debt load, according to an analysis by Ernie Tedeschi, head of economic insights and research at Stripe, the financial technology company.

Tedeschi said he would be “thrilled” if AI could help to deliver those kinds of gains for 10 straight years, but history shows that growth that large due to advancements in computers were likely “wildly optimistic.”

“We should absolutely not be planning for the optimistic scenario,” Tedeschi said.

Up until the president’s comments about interest rates on Friday, the Trump administration has spent the past week trying to make voters feel more confident about the economy.

Treasury Secretary Scott Bessent specifically promoted the benefits of stronger growth at the G20 summit for finance ministers in North Carolina. Commerce Secretary Howard Lutnick did so as well as part of G20 meetings about innovation.

Still, Bessent told AP in an interview that he’s also working with White House budget director Russ Vought to announce a plan to “bring down the level of the debt, deficit.”

There is political risk in trying to meaningfully reduce a year budget deficit of roughly $2 trillion that is slated to exceed $3 trillion a decade from now. Lowering the path of budget deficits would likely help with interest rates, but there could be political pain points in the form of spending cuts and tax hikes.

Brusuelas, the chief economist at RSM US, stressed that Trump would likely need to make sacrifices to meaningfully address the debt and reassure financial markets.

“We need a period of slower growth in government spending — that includes outright reduction in spending in addition to tax increases that all would reduce deficits and interest rates,” he said.