Treasury Report Highlights Rising Inflation, Labor Market Uncertainty Amidst Trump’s Claims
WASHINGTON – A new Treasury department report reveals inflation is currently running at 3.0% annually, a figure that has steadily increased since April when it stood at 2.3%, even as former President Trump continues to assert ther is “no inflation.” The report, released amidst a government shutdown delaying key economic data, paints a complex picture of the U.S. economy, marked by diverging consumer spending habits and a potentially weakening labor market.
The treasury noted a “divergency in spending between the income groups,” as highlighted by Coca-Cola’s Chief Operating Officer,Henrique Braun. While wages for the average worker are slightly outpacing inflation – median pay increased 4.1% as of August – the report underscores broader economic anxieties.
The labor market is showing signs of moderation. Though the treasury describes it as “relatively steady,” it acknowledges “monthly job growth moderated slightly, while the average unemployment rate ticked up only slightly.” Employment growth is currently “below the roughly 100,000 jobs added per month in the first quarter of 2025.” The Treasury attributes this slowdown, in part, to “the drop in population growth related to the forced and self-deportation of illegal immigrants.” importantly, the report states that slower growth “do not indicate…a result of soft GDP growth or weakening aggregate demand.”
Indeed, GDP rose 3.8% in the second quarter. However, the release of third-quarter GDP data, originally scheduled for October 30th, has been delayed due to the ongoing government shutdown. This shutdown has also halted the release of official jobs reports since September. Private payroll processor ADP reported a loss of 32,000 jobs in September, and the delayed october report could reveal another contraction. the treasury anticipates potential headwinds in the fourth quarter of 2025 from declining government employment due to deferred resignations.
Looking ahead, the report acknowledges both “upside and downside risks” to the U.S. economic outlook. The Treasury also flagged the potential disruptive impact of artificial intelligence on the economy and labor markets,noting that “firms that are slow to adapt to the technology could find themselves at a competitive disadvantage.”
The governance stated it will be “monitoring private-sector labor market developments closely” and will pursue “supply-side policies, deregulation, and other reforms” aimed at ”protecting the American consumer.”
