Trump Violates Yet Another Norm, And Possibly The Law

The President teased the Jobs Report an hour before it was officially released. This was both a violation of Federal law, and yet another example of this President violating long-established norms governing how politicians are supposed to act.

Roughly an hour before the April Jobs Report was officially released this morning, Donald Trump posted a comment on Twitter stating he was “looking forward” to the release of today’s jobs report, while this may seem innocent enough it’s actually a violation of yet another norm of American politics and, potentially, of Federal law:

WASHINGTON — President Trump broke years of presidential protocol on Friday morning by posting a tweet that signaled a strong jobs report was on its way from the Labor Department an hour before the report was released.

The Bureau of Labor Statistics routinely releases its monthly employment report on the first Friday of the month. The night before, under longstanding tradition, the president and several senior administration officials — including the Treasury secretary and the chairman of the Council of Economic Advisers — are briefed on the numbers, which they are not supposed to disclose until the report is made public at 8:30 a.m. Eastern Time the next morning.

But Mr. Trump, who was briefed on the numbers Thursday evening, appeared to foreshadow the strength of the latest report on Friday morning on Twitter.

Social media users saw the message as evidence that Mr. Trump had seen the numbers, and that they were good. Sure enough, the report showed that the economy added 223,000 jobs in May, above forecasters’ expectations. The unemployment rate dipped to 3.8 percent — the lowest level in 18 years.

Larry Kudlow, the chairman of the National Economic Council, said that he had shared the jobs report on Thursday evening with the president but expressed no concern with Mr. Trump’s tweet on Friday morning.

“I don’t think he gave anything away, incidentally. I think this is all according to routine, law and custom,” Mr. Kudlow said on CNBC.

On Wall Street, where the 8:30 a.m. release on Jobs Friday is a major event for the markets each month, traders disagreed on whether the tweet actually moved prices, which fluctuate constantly and make it difficult to determine if any single event pushed them in one direction or another.

(…)

Washington has long tried to prevent market-moving data like the employment numbers from being prematurely released. In 1985, the White House Office of Management and Budget issued a rule governing the release of embargoed federal data like the jobs report, including a requirement that employees of the executive branch not comment publicly on the data until an hour after its release.

“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,” the rule states. “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.”

Here’s the Trump tweet in question:

And here’s what the relevant rule states in full:

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.

And, Trump’s Tweet does seem to have had at least some impact on the market in the hour before the report was released:

The purpose of the rule should be self-evident. The economic data released by the Federal Government, which includes not just the monthly jobs reports but also reports on consumer spending, orders for “durable goods,” quarterly estimates of Gross National Product and other pieces of information are often considered to be especially significant to traders on Wall Street. The direction those numbers take on any given day can move the markets for stocks and bonds alike in significant directions, especially if they diverge significantly from what analysts and traders were expecting from those numbers. Having those numbers in advance of their official release could provide traders with significant advantages since it would permit them to place pre-market trades based on what is, in the classic sense, inside information. It’s because of this that the rule was adopted in the first place. The terms of the rule are so stringent that reporters who cover the Labor Department and other agencies responsible for the release of this data are kept in a room where they are allowed to have advance access to the data so that they can prepare their reporting in advance but from which they are unable to communicate with the outside world.

With respect to the employment numbers, the monthly report is also made available to certain select members of the Administration, including the President, generally late in the afternoon of the day before the report is released. As I understand it, it is generally a small group of people who receive this information, such as the Chief of Staff, Treasury Secretary, the head of the President’s Council of Economic Advisers, and, of course, the President himself. All of these people, including the President are governed by the same rule. This is one reason why you generally won’t see an official statement from the White House or the Administration publicly commenting on any economic report until after the markets have opened in New York City at 9:30 am. Again, the reasoning by this part of the rule is obvious, to prevent comments from the government from having an impact on the market or giving traders advance knowledge of information the public isn’t supposed to have until its official release time.

Not surprisingly, the Administration sought to downplay the whole thing:

Given that Trump didn’t report exact numbers, it’s probable that he didn’t technically violate the rule in question, but he certainly came close to doing so, and it raises concerns about the future and what impact this breach of protocol will have in the future. Clearly, Trump sent that tweet this morning because it was relatively good news and he wanted the press, the public, and especially his supporters to pay attention to it. Now that he’s broken this protocol, though, one wonders how traders will react on future days when important numbers are about to be released. If one can draw a postive inference from the fact that the President tweeted a “heads-up” an hour in advance of the jobs report, what conclusion will traders reach if he fails to do so in the future, and what impact will that have on markets? That’s why this violation of a long-standing norm, and potentially the law, is important.

On a final note, Bill Kristol asked a rather blunt question this morning:

The answer to this question is clearly that we cannot be sure that this hasn’t or wouldn’t happen thanks to the fact that this President has already violated nearly every other norm that applied in the past. There’s something truly disconcerting about that.

FILED UNDER: Donald Trump, Economics and Business, Law and the Courts, Politicians, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. MarkedMan says:

    I am willing to bet one large icy cold beer that before the end of his presidency we will find out that Trump has been giving information like this out to his friends so they can make a stock market killing. Any takers?

    Side Note: Interesting article at Vox on why it is harder for Trump to pardon his way out of his crimes than it might seem.

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  2. Joe says:

    Bill Kristol

    @BillKristol

    By the way, since Trump is tweeting ahead of time about the unemployment numbers, are we confident he isn’t also privately telling family and friends about them ahead of time so they can front run the market?
    7:27 AM – Jun 1, 2018

    How is this even a question? Of course he is. What piece of information is out there that would in any way suggest he is not.

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  3. JKB says:

    So where is this “law” supposedly violated? An OMB “rule” is not a law?

    And who was in doubt the report was going to be a good jobs report? Is there some secret code in the timing of the public broadcast of the tweet that gives away how good the report would be?

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  4. pylon says:

    If, next time a jobs report is due and he doesn’t tweet, it will be a signal that it’s not a good report. He royally messed this up by establishing a new mode of conduct.

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  5. Franklin says:

    @MarkedMan: The only point of me taking that bet would be so that I could buy you a beer sometime.

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  6. OzarkHillbilly says:

    Aww c’mon guys, we all know they cook the numbers on these jobs reports all the time to make themselves look good. I mean, that’s what some NY real estate developer was saying a few years ago. Can’t recall his name….

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  7. CSK says:

    If Trump knew this yesterday afternoon, you can be sure his spawn did, and the people with whom he wishes to curry favor did.

    I don’t think he has friends in the sense that most of us understand friendship.

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  8. Franklin says:

    @JKB:

    And who was in doubt the report was going to be a good jobs report?

    Um, the forecasters? Can you even read?

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  9. Kathy says:

    It’s hard to move people for a technical violation of a rule.

    On the other hand, there’s Kristol’s question. That would not only be illegal, but also highly unethical and corrupt. That does move people.

    So I hope some enterprising journalist will begin looking at known associates of Trump for a pattern of trades on the first Friday of every month since the Cheeto moved into the White House. also of payments from/to these people to/from shell companies, offshore companies, tax heavens, the Trump organization, Trump relatives, Trump friends and Trump associates. If the Cheeto has not only been babbling numbers, but also getting a commission or, worse, getting them to trade covertly with his money, that should be a scandal that would make even the leader of a banana republic blush.

    And if they find nothing, we at least know Trump ins’t thathorrible.

    Win/win.

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  10. Daryl and his brother Darryl says:

    Lost in this kerfuffle is the fact that the last 16 months of Obama’s Presidency saw more jobs created than the first 16 months of Dennison’s…by an average of 30,000+ jobs a month. And Obama didn’t blow a trillion dollar hole in the debt to do it.
    And for you sycophants that think Dennison has unleashed some kind of economic juggernaut, take a look at this graph.
    https://twitter.com/adamdavidson/status/1002557283715506176?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet

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  11. Daryl and his brother Darryl says:

    And Melania is still MIA.

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  12. Kathy says:

    @Daryl and his brother Darryl:

    And Melania is still MIA.

    Couldn’t care less.

    But, maybe she’s managed to escape? 😛

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  13. Daryl and his brother Darryl says:

    @Kathy:

    Couldn’t care less.

    Seriously? A White House divorce would be awesome!!!

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  14. CSK says:

    @Daryl and his brother Darryl: @Kathy: @Daryl and his brother Darryl:

    According to what I’ve read, it takes about three weeks for the obvious signs of a facelift to recede: swelling, bruising, incisions, etc., and as much as a year for to achieve full results. I doubt she’ll remain immured for another 343 days, but, come on…what else do you think that surgical procedure was? There is always, of course the danger that I’ve pointed out, which is simply that if she has more facial work done, her eyes will be on the sides of her head.

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  15. @Daryl and his brother Darryl:

    No she’s not. Several reporters have said on Twitter that they have seen her in the West Wing this week.

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  16. Guarneri says:

    LOL

    How petty can you get?

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  17. Jen says:

    @JKB: Generally speaking, governmental rules carry the force and effect of laws.

    https://fas.org/sgp/crs/misc/R41546.pdf

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  18. Warren Weber says:

    How quickly they forget…

    https://twitter.com/GOP/status/1002656499796242437/video/1

    Short version: a montage of video clips of Obama and his representatives “cautioning” about bad jobs reports due to be released the day following.

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  19. Mister Bluster says:

    @JKB:..So where is this “law” supposedly violated?
    On the books. See Jen’s post above.
    Same place the laws against sexual assault are recorded.
    But we know you don’t care that REPUBLICAN President Pud “grabs them by the pussy” or commits adultery wth porn stars.
    Next time around your boyfriend will likely demand repealing sexual assault laws as part of the Family Values plank in the REPUBLICAN platform just for you.

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  20. JKB says:

    Oh, look here is what a real violation of the OMB rule looks like and contains enough specificity to be considered insider knowledge

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  21. TM01 says:

    @Warren Weber:
    Please stop posting things like this.

    We all know that History began with Trump.

    NOTHING happened before Trump. EVERYTHING Trump does is new and breaks The Norms.

    This article by Doug is just more proof that no one paid attention to anything before Trump. Especially him. I expect the dolt commenters here to just lap this crap up, but Doug is supposed to be the Smart, Insightful One.

    The only thing “new” here is that Trump made his comment via a Tweet instead of actually appearing on camera.

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  22. Warren Weber says:

    @TM01: You deeply shame me. I have engaged in that foulest of the newly-discovered sin, the one known as “whataboutism.” To those unaware of this horrid deed, it’s the act of pointing out the hypocrisy of others by noting that they are objecting most strenuously to deeds that they previously had no objection to when they liked the person who first committed the now-heinous deed.

    I am sorely repentant, and will seek some way to atone.

    I’m thinking for starters, I can call some conservative woman a “feckless c*nt.” Since Samantha Bee broke that ground on TBS last week, it probably falls under the local rule about language “stronger than that normally permitted on network television” and is now permissible. Kind of like how frequently people toss around the “p*ssy grabber” term without fear of consequences.

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