It's Trump's economy now. The latest financial numbers offer some
warning signs
[August 02, 2025] By
JOSH BOAK and CHRISTOPHER RUGBER
WASHINGTON (AP) — For all of President Donald Trump’s promises of an
economic “golden age,” a spate of weak indicators this week told a
potentially worrisome story as the impacts of his policies are coming
into focus.
Job gains are dwindling. Inflation is ticking upward. Growth has slowed
compared to last year.
More than six months into his term, Trump’s blitz of tariff hikes and
his new tax and spending bill have remodeled America’s trading,
manufacturing, energy and tax systems to his own liking. He’s eager to
take credit for any wins that might occur and is hunting for someone
else to blame if the financial situation starts to totter.
But as of now, this is not the boom the Republican president promised,
and his ability to blame his Democratic predecessor, Joe Biden, for any
economic challenges has faded as the world economy hangs on his every
word and social media post.
When Friday’s jobs report turned out to be decidedly bleak, Trump
ignored the warnings in the data and fired the head of the agency that
produces the monthly jobs figures.
“Important numbers like this must be fair and accurate, they can’t be
manipulated for political purposes,” Trump said on Truth Social, without
offering evidence for his claim. “The Economy is BOOMING.”
It’s possible that the disappointing numbers are growing pains from the
rapid transformation caused by Trump and that stronger growth will
return — or they may be a preview of even more disruption to come.
Trump's economic plans are a political gamble
Trump's aggressive use of tariffs, executive actions, spending cuts and
tax code changes carries significant political risk if he is unable to
deliver middle-class prosperity. The effects of his new tariffs are
still several months away from rippling through the economy, right as
many Trump allies in Congress will be campaigning in the midterm
elections.
“Considering how early we are in his term, Trump’s had an unusually big
impact on the economy already,” said Alex Conant, a Republican
strategist at Firehouse Strategies. “The full inflationary impact of the
tariffs won’t be felt until 2026. Unfortunately for Republicans, that’s
also an election year.”
The White House portrayed the blitz of trade frameworks leading up to
Thursday's tariff announcement as proof of his negotiating prowess. The
European Union, Japan, South Korea, the Philippines, Indonesia and other
nations that the White House declined to name agreed that the U.S. could
increase its tariffs on their goods without doing the same to American
products. Trump simply set rates on other countries that lacked
settlements.
The costs of those tariffs — taxes paid on imports to the U.S. — will be
most felt by many Americans in the form of higher prices, but to what
extent remains uncertain.
“For the White House and their allies, a key part of managing the
expectations and politics of the Trump economy is maintaining vigilance
when it comes to public perceptions,” said Kevin Madden, a Republican
strategist.
Just 38% of adults approve of Trump’s handling of the economy, according
to a July poll by The Associated Press-NORC Center for Public Affairs.
That’s down from the end of Trump’s first term when half of adults
approved of his economic leadership.
The White House paints a rosier image, seeing the economy emerging from
a period of uncertainty after Trump’s restructuring and repeating the
economic gains seen in his first term before the pandemic struck.
“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,” White
House spokesman Kush Desai said.
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A Trader works on the floor of the New York Stock Exchange, Friday,
Aug. 1, 2025, in New York. (AP Photo/Yuki Iwamura)
 Recent economic reports suggest
trouble ahead
The economic numbers over the past week show the difficulties that
Trump might face if the numbers continue on their current path:
— Friday's jobs report showed that U.S. employers
have shed 37,000 manufacturing jobs since Trump's tariff launch in
April, undermining prior White House claims of a factory revival.
— Net hiring has plummeted over the past three months with job gains
of just 73,000 in July, 14,000 in June and 19,000 in May — a
combined 258,000 jobs lower than previously indicated. On average
last year, the economy added 168,000 jobs a month.
— A Thursday inflation report showed that prices have risen 2.6%
over the year that ended in June, an increase in the personal
consumption expenditures price index from 2.2% in April. Prices of
heavily imported items, such as appliances, furniture, and toys and
games, jumped from May to June.
— On Wednesday, a report on gross domestic product — the broadest
measure of the U.S. economy — showed that it grew at an annual rate
of less than 1.3% during the first half of the year, down sharply
from 2.8% growth last year.
“The economy's just kind of slogging forward,” said Guy Berger,
senior fellow at the Burning Glass Institute, which studies
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.”
Trump's Fed attacks could unleash more inflation
Trump has sought to pin the blame for any economic troubles on
Federal Reserve Chair Jerome Powell, saying the Fed should cut its
benchmark interest rates even though doing so could generate more
inflation.
Trump has publicly backed two Fed governors, Christoper Waller and
Michelle Bowman, for voting for rate cuts at Wednesday's meeting.
But their logic is not what the president wants to hear: They were
worried, in part, about a slowing job market.
But this is a major economic gamble being undertaken by Trump and
those pushing for lower rates under the belief that mortgages will
also become more affordable as a result and boost homebuying
activity.
His tariff policy has changed repeatedly over the last six months,
with the latest import tax numbers serving as a substitute for what
the president announced in April, which provoked a stock market
sell-off. It might not be a simple one-time adjustment as some Fed
board members and Trump administration officials argue.
Trump didn't listen to the warnings on ‘universal’ tariffs
Of course, Trump can't say no one warned him about the possible
consequences of his economic policies.
Biden, then the outgoing president, did just that in a speech last
December at the Brookings Institution, saying the cost of the
tariffs would eventually hit 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.”
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