WASHINGTON (AP) — Despite President Donald Trump’s promises of an economic “golden age,” recent weak indicators have emerged, signaling potential problems as the impact of his policies becomes evident. Job gains are declining, inflation is rising, and overall growth has slowed compared to last year.
More than six months into his presidency, Trump's aggressive tariff hikes and the introduction of a new tax and spending bill have restructured America’s trading, manufacturing, energy, and tax systems. While Trump is keen to take credit for any economic successes, he is also hunting for someone to blame if financial conditions begin to falter. Currently, however, the promised economic boom has yet to materialize, and Trump's ability to attribute economic difficulties to his Democratic predecessor, Joe Biden, has diminished as the global economy closely monitors his words and social media activity.
Following the release of a bleak jobs report, which indicated a downturn in workforce numbers, Trump fired the head of the agency responsible for the monthly job figures. He claimed on Truth Social that “important numbers like this must be fair and accurate, they can’t be manipulated for political purposes,” despite failing to present any evidence to support his assertion. He insisted that “the Economy is BOOMING.”
It is feasible that the disheartening numbers reflect the growing pains associated with Trump’s rapid economic transformations, suggesting a potential return to stronger growth. However, they could also be a harbinger of further economic disruption.
Trump’s economic strategy presents a significant political gamble, particularly if it fails to deliver prosperity for the middle class. The effects of his tariffs won’t be fully felt until late 2026, coinciding with crucial midterm elections for Republican allies in Congress. Republican strategist Alex Conant acknowledged that “considering how early we are in his term, Trump’s had an unusually big impact on the economy already.”
The White House has framed the series of trade agreements leading up to the recent tariff announcement as evidence of Trump’s negotiating skills. Countries including the European Union, Japan, and South Korea have reportedly agreed to allow the U.S. to increase tariffs on their goods without reciprocating on American products. Yet, the costs associated with these tariffs will likely be passed onto American consumers, leading to higher prices.
Public approval of Trump’s economic leadership has also dipped significantly; a recent poll by The Associated Press-NORC Center for Public Affairs revealed that only 38% of adults approved of his handling of the economy, a decline from the 50% approval rate at the end of his first term.
Recent economic reports vividly illustrate the challenges Trump faces: Friday’s jobs report disclosed a loss of 37,000 manufacturing jobs since the initiation of Trump's tariffs in April, contradicting previous claims of a factory revival. Furthermore, net hiring has sharply decreased, with job gains plummeting to just 73,000 in July, 14,000 in June, and 19,000 in May, significantly lower than the previous year’s average of 168,000 jobs per month.
Inflation is also becoming a pressing concern, with a recent report showing a 2.6% rise in prices over the year ending in June, an increase from the 2.2% rate observed in April. This inflation surge, particularly in heavily imported goods like appliances and furniture, hints at further economic strain.
Additionally, a report on gross domestic product (GDP) revealed that it grew at an annual rate of less than 1.3% in the first half of the year, a notable decrease from the previous year's 2.8% growth. Guy Berger, a senior fellow at the Burning Glass Institute, characterized the economy as “slogging forward,” highlighting the sluggish job growth amid stagnant unemployment rates.
Trump has directed some criticism towards Federal Reserve Chair Jerome Powell, suggesting that the Fed should lower its benchmark interest rates, though doing so may intensify inflation. He has supported two Fed governors for their votes advocating for rate cuts. However, these governors expressed concerns related to the slowing job market, contradicting Trump’s positions.
Ultimately, Trump’s economic maneuvers have been inconsistent over the past six months, leading to speculations about their long-term viability. Warnings from critics, including Biden, about the potentially detrimental effects of universal tariffs on American consumers were articulated prior to Trump’s tariffs. As Biden noted, “He seems determined to impose steep, universal tariffs on all imported goods... I believe this approach is a major mistake.”
