Ten indicators of what's going on with America's economy

Copyright © HT Digital Streams Limit all rights reserved. Economist, The Economist 6 min Read 30 Sept 2025, 03:35 pm ist Mint Default Comption Summary Trumponomics has begun to hit America’s growth editor’s note (August 2, 2025): This story has been updated with the latest economic data and analysis. America’s remarkable range of economic growth could slow down. Recent data indicates weaker production than rates, economic uncertainty, migration and attacks on institutions such as the Federal Reserve is taking their toll. The photo may be dark soon. Staff cuts at agencies such as the Bureau of Labor Statistics (BLS) already appear to be interfering with the inflation data, which is labor intensive to compile. According to a BLS report, the sample for the latest figures was down more than 15%. After a poor job report on August 1, President Donald Trump said he would make the BLS commissioner responsible – a remarkable act of political interference. We show ten cards below that can still be obtained from the data. GDP figures for the first two quarters of 2025 show that growth has begun to decline. Rate in front of the front, muddy trading numbers early in the year, making the head figures difficult to read. In the first quarter, businesses rushed to America before tariff dates. The boom wrote off the net export, which was not completely offset by an increase in stock (probably due to measurement errors). As a result, the GDP has shrunk. The same effect uncovered in the second quarter and produced a strong increase from the previous quarter. One way to cut the noise is by looking at private spending and investment only (see right card). The growth in actual final sales to private domestic buyers (sometimes called nuclear buses) remained positive, but began to delay in 2025. Poor payroll, including sharp downward revisions for the past few months’ data, tells the same story. It seems inflation is picking up. The Fed’s preferred measure-the annual increase in the price index for personal consumption expenses-affected to 2.6%in June, above the Fed’s target of 2%. (See the inflation breeder of the economist.) Prices are to a large extent beyond the direct control of the White House (although Joe Biden’s big stimulus in 2021 certainly did not help to help matters). But the rates of Mr. Trump begins to flow into goods prices. The Fed looks ready to keep the large interest rate cuts off until the form of tariff inflation is clearer. Despite the gloom, stock markets have made a remarkable recovery of the early volatility of the year. The S&P 500 index of major US firms is back at historical highlights. The profits during the second term of Mr. Trump was still smaller than in the opening months of recent chairmanship, including his first term. And his latest spate of rates, announced on July 31 and August 1, apparently weighed on sentiment: The S&P 500 closed 2.5% lower the week. Global stock markets have also fallen. Ordinary Americans still feel condescending. A disadvantage of consumer sentiment, published by the University of Michigan, has dropped to the lowest level since mid -2022 following the tariff announcements of Mr. Trump in April, and first turned. Low reading readings often indicated recessions. Inflation is especially major as a problem: Long-term inflation expectations are at their highest in decades. The surfaces are far from perfect what indicators are. Answers to the Michigan questions are strongly colored by partisan affiliates, with Democrats who are now much gloomier than Republicans. But other meters paint a similar picture. An index of consumer sentiment published by the Conference Council, an operating research group, has also dropped to the lowest since October 2011 before recovering a bit. If Americans tighten their wallet strings, GDP will also rally: Consumption is about two-thirds of US GDP. Retail sales are slightly lower, but still look wide. The question for the coming months is how much further Mr. Trump’s trade policies undermine the consumer economy. The job market looks more fragile. So far, unemployment remains low according to historical standards and unemployed demands have not acted. But the rate of the rent has delayed sharply, possibly an early warning of problems ahead. It said that America’s job market was strikingly resilient for colossal shocks. When the Fed began to raise interest rates in 2022, many analysts and investors thought that monetary tightening would lead to great dismissal. Instead, the economy has had several buffers: Consumers have accumulated enough savings during the pandemic; Companies have closed low financing rates; And there was a surge in AI-related expenses. There was also some anxiety this time that AI could possibly destroy work at entry level, although this effect is still difficult to see in the official figures. One way to measure all this uncertainty is the economic policy uncertainty index. It was created by three academic economists and stops media coverage, tax policies and differences of opinion among economic predictors. It rose at the peak of Covid before falling below Mr Biden below the long -term average. Now it is rising again, although it is a bit of April’s peaks. Uncertainty in itself can be a problem and act as an obstacle to both businesses and consumers facing difficult decisions. It is difficult to connect a big purchase or investment as the next few months, let alone the next few years, so difficult to predict. With America’s debt load balloning, Mr. Trump promises that he will lower federal expenses. He created no matter with the supposed intention to identify fraud and wastage, and eliminate as much as $ 2TRN a year from the government’s budget. It was always a far -fetched ambition: cuts of that size would exceed government’s total discretionary spending. In that sense, it is good to see that Mr. Trump is grieved on his planned cuts: as measured by cash outflow from the Treasury, spending lasts before the previous years. Unfortunately, America’s fiscal lane remains unsustainable. For all the drama and debate around the policy of Mr. Trump, it is important to remember that the economy is affected by much more than just the program of the Oval Office’s occupant. The real estate market is an important determination of the business cycle, and it responds more to loan figures than any presidential policy. High interest rates are now a big wind wind. The average interest rate for a 30-year fixed-rate mortgage was 6.81%in April, far above the low rates that looked normal in the decade before Covid. Home sales have been driving down the Covid peaks steadily since the Covid peaks, and with mortgages that remain so expensive, there is probably little relief on the horizon. This will impair the construction activity. Our final measure is the dollar. Both Mr. Trump and JD Vance, his vice president, argued for a weaker currency, saying that the Greenback’s power is a problem for the US industry (because they say, companies will struggle to sell their products abroad). In a narrow sense, they achieved an early victory here: the dollar has lost the land against most other major currencies since Mr. Trump held the office. The problem is that this weakness stems mainly from its policy, especially its ultra-aggressive trading tactics. While investors are questioning the stability of America, the risk of reducing their appetite for US assets and, in extension, the dollar. A weaker dollar can eventually contribute the inflationary pressure by increasing the cost of imported goods. Only a few months ago, many investors were convinced that Trumponomics would promote America’s business environment by cutting red tape and making it a more attractive destination for foreign capital. But the story of his first six months in office is how much its agenda was consumed by his chaotic rates, a war against the public service and attacks on the Fed. The dangers of his approach begin to turn in the economic data. 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