Economy Falters as Trump’s Policies Crystallize

Weak Indicators Emerge Amidst Tariff Hikes and Tax Overhaul

President **Donald Trump**’s promises of an economic boom are facing scrutiny as recent data reveals a concerning trend of slowing growth, declining job gains, and rising inflation.

Economic Indicators Signal Troubled Waters

Several key economic reports released this week paint a potentially worrying picture for the nation’s financial health. Job growth has shown a marked decline, inflation is on the rise, and the overall pace of economic expansion has softened compared to the previous year.

Despite his administration’s efforts to reshape trade, manufacturing, energy, and tax systems through tariffs and legislative changes, the anticipated “golden age” has yet to fully materialize. The President is reportedly eager to claim credit for any successes while seeking to deflect blame for any downturns.

The current economic climate does not reflect the robust growth initially projected. As the global economy closely watches his pronouncements, the ability to attribute economic challenges to his predecessor, **Joe Biden**, is diminishing.

Job Report Sparks Retaliation

Following a particularly weak jobs report, President **Trump** publicly dismissed the data, asserting it was politically manipulated and asserting that the economy was “BOOMING.” He proceeded to dismiss the head of the agency responsible for compiling the monthly employment figures.

“Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes,” @realDonaldTrump said on Truth Social, without offering evidence for his claim. “The Economy is BOOMING.”

— world-today-news.com (@WorldTodayNews) August 28, 2023

While these disappointing figures could represent temporary disruptions from significant policy shifts, they might also foreshadow further economic turbulence.

Tariffs: A Political Gamble with Future Repercussions

President **Trump**’s assertive economic strategy, including tariffs, executive actions, spending cuts, and tax code revisions, presents a substantial political gamble. The full economic impact of his recent tariffs is not expected to be felt for several months, potentially coinciding with crucial midterm election campaigns for his allies.

“The full inflationary impact of the tariffs won’t be felt until 2026. Unfortunately for Republicans, that’s also an election year,” noted **Alex Conant**, a Republican strategist at Firehouse Strategies. He added that **Trump** has already exerted an unusually large influence on the economy early in his term.

The White House has characterized the recent trade agreements and tariff announcements as demonstrations of the President’s negotiating skills. Agreements were reportedly reached with nations including the European Union, Japan, South Korea, the Philippines, and Indonesia, allowing the U.S. to increase tariffs on their goods without reciprocal action on American products. Countries without such settlements faced new tariff rates set by the administration.

These tariffs, essentially taxes on imported goods, are likely to translate into higher prices for American consumers, though the precise extent remains unclear. Maintaining public confidence in the economy is a key concern for the White House and its supporters.

A July poll by The Associated Press-NORC Center for Public Affairs indicated that only 38% of adults approve of **Trump**’s economic management, a decline from the 50% approval at the end of his first term.

However, the White House maintains an optimistic outlook, viewing the current economic landscape as a recovery from a period of adjustment following **Trump**’s policy restructuring, echoing the economic gains prior to the pandemic. White House spokesman **Kush Desai** stated, “President **Trump** is implementing the very same policy mix of deregulation, fairer trade, and pro-growth tax cuts at an even bigger scale – as these policies take effect, the best is yet to come.”

Recent Economic Data Paints a Grim Picture

The latest economic reports highlight potential challenges for the President if current trends persist:

• The jobs report revealed a loss of 37,000 manufacturing jobs since the introduction of tariffs in April, contradicting White House claims of a factory resurgence.
• Net hiring has significantly decreased over the past three months, with job gains averaging just 73,000 in July, 14,000 in June, and 19,000 in May, totaling 258,000 fewer jobs than previously estimated. This contrasts sharply with the previous year’s average monthly job additions of 168,000.
• An inflation report showed a year-over-year increase of 2.6% in personal consumption expenditures through June, up from 2.2% in April. Prices for imported goods like appliances, furniture, and toys saw notable increases between May and June.
• Gross domestic product (GDP) data indicated a growth rate of less than 1.3% for the first half of the year, a sharp decline from the 2.8% growth recorded in the previous year.

“The economy’s just kind of slogging forward,” observed **Guy Berger**, a senior fellow at the Burning Glass Institute, a firm specializing in employment trends. “Yes, the unemployment rate’s not going up, but we’re adding very few jobs. The economy’s been growing very slowly. It just looks like a ‘meh’ economy is continuing.”

Fed Policy and Tariff Uncertainty Compound Economic Risk

President **Trump** has frequently criticized Federal Reserve Chair **Jerome Powell**, advocating for interest rate reductions, a move that could potentially exacerbate inflation. While **Trump** has publicly supported Fed governors **Christoper Waller** and **Michelle Bowman** for their votes favoring rate cuts, their reasoning was reportedly rooted in concerns about a decelerating job market.

This approach represents a significant economic gamble, with proponents believing lower mortgage rates will stimulate home buying. The administration’s tariff policies have been inconsistent over the past six months, with revised import tax figures replacing earlier announcements that had previously unsettled financial markets.

Warnings Ignored on Universal Tariffs

President **Trump** was reportedly warned about the potential consequences of his economic policies. Then-President-elect **Joe Biden** had cautioned in December at the Brookings Institution that the costs of tariffs would ultimately burden American workers and businesses.

“He seems determined to impose steep, universal tariffs on all imported goods brought into this country on the mistaken belief that foreign countries will bear the cost of those tariffs rather than the American consumer,” Biden said. “I believe this approach is a major mistake.”

—Joe Biden, then-President-elect

The U.S. Bureau of Labor Statistics reported that the U.S. economy added 187,000 jobs in August 2023, surpassing economists’ expectations of 170,000 jobs. Despite this positive jobs report, broader economic concerns remain due to ongoing policy shifts. For context, the average hourly earnings in the U.S. increased by 0.2% in August 2023, slightly below the 0.3% expected increase.