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About all of President Donald Trump’s promises of an economic “golden age” this week’s weak indicator Splate told a potentially worrying story as the impact of his policy is focused.
The profits from work are declining. Inflation is upwards. Growth has slowed compared to last year.
More than six months after his term, Trump’s tariff hikes and his new tax and spending bills transformed American trade, manufacturing, energy and tax systems into his own preferences. He wants to praise the potential victory that may arise, and hunts for someone else to take responsibility if the financial situation begins to tremble.
But for now, this is not the boom promised by the Republican president, and his ability to blame his democratic predecessor, Joe Biden, is waning all economic challenges as the world economy rests on every word and social media post.
When Friday’s employment report turned out to be clearly bleak, Trump ignored data warnings and fired the head of the agency that produces monthly job numbers.
“These important figures must be fair and accurate. They cannot manipulate them for political purposes,” Trump said in the True Society without providing evidence of his claim. “The economy is booming.”
The unfortunate number is the increased pain caused by the rapid transformation caused by Trump, which could bring back its strong growth. Or it could be a more confusing preview.
Trump’s economic plan is political gambling
Trump’s aggressive use of tariffs, enforcement actions, spending cuts and tax law changes poses significant political risks if they fail to bring about middle class prosperity. The impact of his new tariffs is still months away from rippling the economy, as many Trump allies in Congress campaign in midterm elections.
“Given how quickly we were in his term, Trump had already had an extraordinarily significant economic impact,” said Alex Conant, a Republican strategist at Firehouse Strategies. “The full inflation effect of tariffs will not be felt until 2026. Unfortunately for Republicans, it is also an election year.”
The White House painted a blitz of the trade framework as evidence of his negotiation skills leading up to Thursday’s tariff announcement. The European Union, Japan, South Korea, the Philippines, Indonesia and other countries that the White House rejected their names have agreed that the US could increase tariffs on goods without doing the same thing as American products. Trump simply sets the rates in other countries that are lacking in the settlement.
The costs of these duties — taxes paid on imports into the US — are most felt by many Americans in the form of higher prices, but they remain to what extent uncertain.
“An important part of managing Trump’s economy’s expectations and politics for the White House and its allies is staying vigilant about public awareness,” said Republican strategist Kevin Madden.
Just 38% of adults approved Trump’s handling of the economy, according to a July poll by the Associated Press Center. It’s falling from the end of Trump’s first term when half of the adults approved his financial leadership.
The White House draws a more rosy image as the economy emerges from an era of uncertainty following Trump’s restructuring, repeating the economic benefits seen in his first term before the pandemic hit.
“President Trump is implementing a huge combination of deregulation, fairer trade and tax cuts on a larger scale. As these policies take effect, the best has yet to come,” said White House spokesman Kush Desai.
Recent economic reports suggest future troubles
The economic numbers over the past week indicate the difficulties Trump may face if the numbers continue on their current path.
– U.S. employers have taken 37,000 manufacturing jobs since Trump’s tariff launch in April, eroding the revival of the White House factory in advance, according to employment reports Friday.
– Net employment has plummeted over the past three months, with just 73,000 in July, 14,000 in June and 19,000 in May. Last year, the economy added 168,000 jobs a month.
– Thursday’s inflation report showed prices rose 2.6% over the year ended in June, with the personal consumption expenditure price index rising from 2.2% in April. Prices for imported products such as electrical appliances, furniture, toys and games were rushed between May and June.
– On Wednesday, the US economy’s most broad measure, the GDP report, showed an annual rate of less than 1.3% in the first half of the year, a sharp decline from last year’s 2.8% growth.
“The economy is just like moving forward,” said Geyberger, a senior fellow at the Burning Glass Institute, which studies employment trends. “Yes, the unemployment rate hasn’t risen, but we’re adding very little work. The economy is growing very slowly. It looks like the ‘mae’ economy is continuing. ”
Trump’s Fed attack could unleash more inflation
Trump has sought to lock Federal Reserve Chairman Jerome Powell to blame for economic issues.
Trump publicly supported two Federal Reserve Governors, Christo Pearl Waller and Michelle Bowman, for a fee cut vote at Wednesday’s meeting. But their logic is not what the president wants to hear. They were partly concerned about the slower job market.
But this is the main economic gamble undertaken by Trump, and people seeking lower fees under the belief that mortgages will also be affordable as a result, boosting home buying activities.
His tariff policies have changed repeatedly over the past six months, with the latest import tax numbers serving as an alternative to what the president announced in April, causing stock market sales. As some Fed board members and Trump administration officials argue, it may not be a simple one-off adjustment.
Trump has not heard of warnings about “universal” tariffs
Of course, it cannot be said that Trump has warned him about the possible consequences of his economic policies.
Biden, then-president, said in a speech to the Brookings Agency last December that tariff costs would ultimately clash with American workers and businesses.
“He appears to be determined to impose sudden, universal tariffs on all imports brought into this country, with the false belief that foreign countries will bear the costs of those tariffs rather than American consumers,” Biden said. “I think this approach is a big mistake.”
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