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      Good, mad and ugly: the US economy’s performance under Trump – in charts

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      According to Donald Trump’s White House, the US economy is booming, inflation is dead and jobs are surging. A blizzard of economic reports has cast a pall on such claims in recent days.This week’s data on Trump’s early economic record was mixed – good, mad and ugly – with jobs numbers so weak he reached for the catchphrase he once used to build himself into a reality TV star: you’re fired.The picture is chaotic, with robust headline growth in the world’s largest economy, wild swings in trade, and a remarkable slowdown in the labor market.For six months, Trump has staged an extraordinary campaign to overhaul the global economy and extract concessions from Washington’s allies and rivals by threatening and imposing steep tariffs on their US exports.But the unpredictable, erratic rollout of this strategy has already had bizarre consequences.Resilient-ish growthOn the surface, at least, this week’s deluge of data opened with good news: the US economy returned to growth in the second quarter, with gross domestic product (GDP) – a broad measure of economic health – expanding at a rate not seen since last summer.But this followed an unexpected contraction in the first quarter, and underlined some more concerning figures, such as a 15.6% drop in private domestic investment. Businesses have been struggling to keep up with the hour-by-hour jerks and jolts on sweeping economies policies.Yes, there was good growth in the last quarter but in the first six months, the US economy grew at a mediocre 1.2%. The Wall Street Journal called it “the weirdest GDP report ever”.Imports surge and plungeDelve a bit deeper, and you start to see how the US economy is grappling with a series of extraordinary forces as Trump hammers out his trade strategy.Firms spent much of the first quarter waiting for the president to reveal his plans for tariffs: which countries would be targeted, at what rates, and when. They stockpiled, triggering an unprecedented surge in imports that pushed growth into the red.In the second quarter, however, as Trump started to ramp up his economic attacks, imports tumbled at an equally astonishing pace. Net exports – how much a country exports more than it imports – boosted GDP.Interest rates on holdThis is Trump’s least favorite chart. Despite his many public demands, threats and attacks, the Federal Reserve has not yet cut interest rates this year.Why? Jerome Powell, the central bank’s chair, has repeatedly argued it should wait and see the impact of the president’s trade strategy before moving. Fed officials are worried that inflation – despite Trump’s claims that it has collapsed on his watch – has actually remained stubborn, and might rise as a result of his tariffs.This has gone down extremely poorly in the White House, where officials are counting down the weeks until Powell’s term as chair ends next May.Jobs growth stallsData released on Friday fundamentally changed the way US policymakers and politicians think about the economy. Until then, many inside the Fed thought everything was broadly ticking over nicely – and Trump administration officials claimed they were overseeing a boom in activity.But July’s employment report revealed far fewer jobs were created that month than economists had expected, and revised down estimates for May and June by an astonishing 258,000. Job creation has stalled.“Look, this jobs report isn’t ideal,” Stephen Miran, chairman of the White House council of economic advisers, told CNN, before suggesting that fading uncertainty around trade and fiscal policy would lead to significant improvement.“It’s all going to get much, much better from here,” he added. More

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      Trump fires labor statistics chief hours after data showed jobs growth slowed

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      Donald Trump fired the federal government official in charge of labor statistics, hours after data revealed jobs growth stalled this summer, prompting accusations that he is “firing the messenger”.The US president claimed that Erika McEntarfer, commissioner of labor statistics, had “faked” employment figures in the run-up to last year’s election, in an effort to boost Kamala Harris’s chances of victory.Trump later claimed: “Today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad”.He produced no evidence for these allegations, and insisted that the US economy was, in fact, “BOOMING” on his watch.But Friday’s employment figures told a very different story, and raised questions about the state of the labor market since Trump’s return to office.“We need accurate Jobs Numbers,” he wrote on Truth Social. “I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified.”McEntarfer was contacted for comment. The Bureau of Labor Statistics (BLS) confirmed in a brief statement that she had been dismissed. William Wiatrowski, the agency’s deputy commissioner, will serve as acting commissioner.Trump’s abrupt announcement came as administration officials scrambled to explain a lackluster employment report. Not only did jobs growth fail to meet expectations in July, but previous estimates for May and June were revised significantly lower.The president was promptly accused of trying to hide accurate statistics. “Trump is firing the messenger because he doesn’t seem to like jobs numbers that reflect how badly he’s damaged the economy,” said Lily Roberts, managing director for inclusive growth at the Center for American Progress, a thinktank, said.“Politicizing our country’s collection of data on what’s going on in the economy … will make it harder to create an economy that makes sure everyone has a good job,” added Roberts. “Borrowing from the authoritarian playbook fuels more uncertainty that will cost Americans for years to come.”Paul Schroeder, executive director of the Council of Professional Associations on Federal Statistics, described the president’s allegation as “very damaging and outrageous”, adding: “Not only does it undermine the integrity of federal economic statistics but it also politicizes data which need to remain independent and trustworthy. This action is a grave error by the administration and one that will have ramifications for years to come.”McEntarfer is a widely respected economist and veteran employee of the federal government. She previously worked at the US Census Bureau under George W Bush and at the US census bureau under Barack Obama, Trump and Joe Biden.skip past newsletter promotionafter newsletter promotionIn January 2024, before McEntarfer’s confirmation for her current post by the US Senate, her nomination was backed by four former BLS commissioners.In a letter also signed by organizations including the American Statistics Association and a string of senior economists, they said there were “many reasons” to confirm McEntarfer as commissioner of labor statistics, citing her “wealth of research and statistical experience”.She was ultimately confirmed by a vote in the Senate, with 86 votes cast in favor and eight against.Gene Sperling, chair of the national economic council under Bill Clinton and Obama, and who worked as an official under Biden, said he expected Trump to “destroy the credibility” of economic data when his administration suffered its first bad jobs report. “Now: first bad job report, and he just fired BLS head over absurd claims of bias,” Sperling wrote on X, formerly Twitter.Trump’s decision to fire McEntarfer was “outrageous but not surprising”, said Julie Su, former acting US labor secretary under Biden. “He hates facts, so he blames truth-tellers.”The US “needs and deserves trustworthy economic data”, added Su. “This is a pathetic attempt by the president to gaslight everyone about the consequences of his disastrous economic policies.” More

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      As Trump’s tariff regime becomes clear, Americans may start to foot the bill

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      Burying the hatchet with Brussels, Donald Trump – flanked by the leader of the European Commission – hailed a bold new era of transatlantic relations, an ambitious economic pact, and declared: “This was a very big day for free and fair trade.”That was seven years ago. And then on Sunday, the US president – flanked by a different leader of the European Commission – hailed another new era of transatlantic relations, another economic pact and declared: “I think it’s the biggest deal ever made.”Trumpian hyperbole can typically be relied upon as long as he’s in the room, at the lectern or typing into Truth Social. What matters after that is the underlying detail – and we have very little, beyond a handful of big numbers designed to grab headlines.What we do know, as a result of this deal, is that European exports to the US will face a blanket 15% tariff: a tax expected, at least in part, to be passed along to US consumers. The price of key products shipped from the EU, from cars to medicine and wine, is about to come into sharp focus.This pact is not unique. Trump’s agreement with Japan also hits Japanese exports to the US with a 15% tariff. Most British exports to the US face a 10% tariff under his deal with the UK.A string of countries without such accords, including Brazil, Canada and South Korea, are set to face even higher US tariffs from Friday. The Trump administration currently has a blanket 10% levy in place for US imports, although the president threatened to raise this to “somewhere in the 15 to 20% range” earlier this week.Ignore, for a moment, the chaos and the noise. Put to one side the unpredictable stewardship of the world’s largest economy, and its ties with the world. And forget the many U-turns, pauses and reprieves which have followed bold pronouncements, again and again and again.If you, like many businesses in the US and across the world, are struggling to keep up, take a step back and look at a single number. Since Trump took office, the average effective US tariff rate on all goods from overseas has soared to its highest level in almost a century: 18.2%, according to the Budget Lab at Yale.Trump argues this extraordinary jump in tariffs will bring in trillions of dollars to the US federal government. On his watch, tariffs have so far brought in tens of billions of dollars more in revenue this year than at the same point in 2024.But who picks up the bill? The president and his allies have position this fundamental shift in economic policy as a historic move away from taxing Americans toward taxing the world. But in reality, everyone pays.Tariffs are typically paid at the border, by the importer of the product affected. If the tariff on that product suddenly goes from 0% to 15%, the importer – as you’d expected – will try to pass it on. Every company at every stage of the supply chain will quite literally try to pass the buck, as much as possible.And the very end of the chain, economists expect prices will ultimately rise for consumers. The Budget Lab at Yale estimates the short-term impact of Trump’s tariffs so far is a 1.8% rise in US prices: equivalent to an average income loss of $2,400 per US household.skip past newsletter promotionafter newsletter promotionBig firms that have so far done their best to hold prices steady amid the blizzard of tariff uncertainty are now starting to warn of increases. Inflation, which Trump claims is very low in the US, picked up in June.The president appeared to reluctantly reckon with the reality that Americans may start to foot the bill for his tariffs before setting off for Scotland late last week.Asked about the prospect of using revenue from tariffs to distribute “rebate” checks to US consumers, Trump said: “We’re thinking about that, actually … We’re thinking about a rebate, because we have so much money coming in, from tariffs, that a little rebate for people of a certain income level might be very nice.”Given what inflation did to Joe Biden’s electoral fortunes, and Trump’s keen eye for populist policies, it’s hardly a stretch to imagine those cheques – signed by Donald J Trump – landing in bank accounts in time for the midterm elections next November.And such a move would, indeed, be very nice. Especially as it appears increasingly likely that, after this week, Americans will probably be paying more for almost everything. More

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      Feeling flush? Americans can Venmo government to help pay off US debt

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      John F Kennedy’s sage words from his inaugural address are forever seared into America’s political consciousness:“Ask not what your country can do for you – ask what you can do for your country.”Six decades and some change later, the United States Treasury is keeping Kennedy’s spirit alive by offering Americans with a few dollars collecting dust in their Venmo balance a chance to fulfill a new patriotic duty: helping pay off the national debt.The US treasury department has long had a “Gifts to Reduce the Public Debt” page available for those that dislike traditional charity, feel like they don’t pay enough in taxes, or simply want to help the country stay No 1 in an eclectic list of superlatives that includes military spending, Olympic gold medals, prison population, corn subsidies, and healthcare costs.But the new-age, Gen Z-friendly method of payment is a recent addition, first flagged on Twitter by Planet Money’s Jack Corbett.A bipartisan punching bag that trades sides of the aisle depending on who’s in office and who needs funds earmarked for projects in their state, concern over the national debt is one of few issues that Democrats and Republicans can unite on. Also bipartisan is the debt’s growth, which has increased every year since 2001, when it sat at $10.28tn.As of this writing, the debt has ballooned to $36.72tn.America is on track to continue the trend, with the Congressional Budget Office estimating that Trump’s Big Beautiful Bill will add $3.4tn to the debt over the coming decade. It is unclear how much money Trump and Elon Musk’s “Doge” saved, although analysis estimates the number at under the advertised $180bn, and a far cry short of the initially advertised $2tn.The federal government spent $6.75tn in Fiscal Year 2024 while collecting $4.92tn in revenue.Highlights of past and present government spending include the $151bn procurement process for the Trump administration’s Golden Dome missile defense project, over $2tn on Lockheed Martin’s long delayed F-35 fighter jet, and roughly $800bn in annual spending on the Pentagon, which recently failed its seventh audit in a row.Kind-hearted Americans have gone above and beyond their regular tax-paying duties contributing around $67.3m since 1996. That’s enough to fund 20 minutes of the US government’s spending habit.If Americans could dig into their couch cushions, eat less takeout, and tighten their belts, they might be able to tackle the problem once and for all. It would only take about $107,000 per person, payable via ACH, Paypal, credit or debit card, and now, Venmo. More

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      OpenAI CEO tells Federal Reserve confab that entire job categories will disappear due to AI

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      During his latest trip to Washington, OpenAI’s chief executive, Sam Altman, painted a sweeping vision of an AI-dominated future in which entire job categories disappear, presidents follow ChatGPT’s recommendations and hostile nations wield artificial intelligence as a weapon of mass destruction, all while positioning his company as the indispensable architect of humanity’s technological destiny.Speaking at the Capital Framework for Large Banks conference at the Federal Reserve board of governors, Altman told the crowd that certain job categories would be completely eliminated by AI advancement.“Some areas, again, I think just like totally, totally gone,” he said, singling out customer support roles. “That’s a category where I just say, you know what, when you call customer support, you’re on target and AI, and that’s fine.”The OpenAI founder described the transformation of customer service as already complete, telling the Federal Reserve vice-chair for supervision, Michelle Bowman: “Now you call one of these things and AI answers. It’s like a super-smart, capable person. There’s no phone tree, there’s no transfers. It can do everything that any customer support agent at that company could do. It does not make mistakes. It’s very quick. You call once, the thing just happens, it’s done.”The OpenAI founder then turned to healthcare, making the suggestion that AI’s diagnostic capabilities had surpassed human doctors, but wouldn’t go so far as to accept the superior performer as the sole purveyor of healthcare.“ChatGPT today, by the way, most of the time, can give you better – it’s like, a better diagnostician than most doctors in the world,” he said. “Yet people still go to doctors, and I am not, like, maybe I’m a dinosaur here, but I really do not want to, like, entrust my medical fate to ChatGPT with no human doctor in the loop.”His visit to Washington was aligned with the Trump administration’s unveiling of its “AI action plan”, which is focused defining and easing some regulations and promoting more datacenters. Altman’s latest engagement is with the federal government under Donald Trump, which has taken on a new tune compared with years past. While much has changed with the tech over the years, under the Biden administration, OpenAI and its rivals asked the government to regulate AI. Meanwhile under Trump, they talk of accelerating to beat China.At the fireside chat, he said one of his biggest worries was over AI’s rapidly advancing destructive capabilities, with one scenario that kept him up at night being a hostile nation using these weapons to attack the US financial system. And despite being in awe of advances in voice cloning, Altman warned the crowd about how that same benefit could enable sophisticated fraud and identity theft, considering that “there are still some financial institutions that will accept the voiceprint as authentication”.skip past newsletter promotionafter newsletter promotionOpenAI and Altman are already under way on their big pivot to Washington, attempting to crash a party at which Elon Musk once held the golden ticket. Along with announcing plans to open his company’s first office in Washington next year, Altman faced the Senate commerce committee for his first congressional testimony since his high-profile appearance in May 2023 that propelled him on to the global stage. More

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      Trump tax bill to add $3.4tn to US debt over next decade, new analysis finds

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      Donald Trump’s new tax bill will add $3.4tn to the national debt over the next decade, according to new analysis from the nonpartisan Congressional Budget Office (CBO) released Monday.Major cuts to Medicaid and the national food stamps program are estimated to save the country $1.1tn – only a chunk of the $4.5tn in lost revenue that will come from the bill’s tax cuts.The cuts will come through stricter work requirements and eligibility checks for both programs. The CBO estimates the bill will leave 10 million Americans without health insurance by 2034.The bill also makes permanent tax cuts that were first introduced by Republicans in Trump’s 2017 tax bill. The cuts included a reduction in the corporate tax rate, from 35% to 21%, and an increase to the standard deduction. It also includes a tax dedication for workers receiving tips and overtime pay, and removes tax credits that support wind and solar power development, which could ultimately raise energy costs for Americans.Increased costs will also come from boosts to immigration and border security funding. The bill allocates nearly $170bn to immigration law enforcement, including the Immigrations and Customs Enforcement (Ice) agency and funding for a wall along the southern border.The Committee for a Responsible Federal Budget estimates that, with interest, the bill will actually add $4.1tn to the deficit. The US national debt currently stands at more than $36tn.“It’s still hard to believe that policymakers just added $4tn to the debt,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement. “Modelers from across the ideological spectrum universally agree that any sustained economic benefits are likely to be modest, or negative, and not one serious estimate claims this bill will improve our financial situation.”Trump signed the bill into law earlier this month after weeks of debate among congressional Republicans. The bill passed the Senate 51-50 before it passed the House 218-214.While Republicans largely celebrated the bill, with Trump calling it “the most popular bill ever signed in the history of the country”, only a quarter of Americans in a CBS/YouGov poll said that the bill will help their family.Democrats meanwhile universally criticized the bill, with Ken Martin, chair of the Democratic National Committee saying that while “the GOP continues to cash their billionaire donors’ checks, their constituents will starve, lose critical medical care, lose their jobs – and yes, some will die as a result of this bill.” More

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      Trump’s latest tariffs ‘are real’ unless deals improve, economic adviser says

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      Donald Trump has seen some trade deal offers and thinks they need to be better, Kevin Hassett, the White House economic adviser, said on Sunday, adding that the president will proceed with threatened tariffs on Mexico, the European Union and other countries if they don’t improve.“Well, these tariffs are real if the president doesn’t get a deal that he thinks is good enough,” Hassett told ABC’s This Week program. “But you know, conversations are ongoing, and we’ll see where the dust settles.“Hassett told ABC’s This Week program that Trump’s threatened 50% tariff on goods from Brazil reflect Trump’s frustration with the South American country’s actions as well as its trade negotiations with the US.On Thursday, Brazil threatened to retaliate against Trump’s plan with its own 50% tariff on US goods. “If he charges us 50%, we’ll charge him 50%,” Luiz Inácio Lula da Silva, the Brazilian president, told local news outlet Record, a day after Trump threatened to impose steep duties on Brazilian goods.Hassett’s comments come one day after Trump announced on his Truth Social social media platform that goods imported from both the European Union and Mexico will face a 30% tariff rate starting on 1 August, angering European capitals who had thought they had previously reached a deal with Trump. The prior deal would have involved a 10% tariff, five times the pre-Trump tariff, which the bloc already described as “pain”.The German chancellor, Friedrich Merz, on Sunday said he will work intensively with French president Emmanuel Macron and European Commission president Ursula von der Leyen to resolve the escalating trade war with the United States.“I discussed this intensively over the weekend with both Macron and Ursula von der Leyen,” Merz told German broadcaster ARD, adding he had also spoken with Trump about the matter.“We want to use this time now, the two and half weeks until August 1 to find a solution. I am really committed to this,” Merz said.Merz said the German economy would be hit hard by the tariffs, and he was doing his best to make sure US tariffs of 30% were not imposed.Unity in Europe and a sensible dialogue with the US president were now needed, Merz said, although countermeasures should not be ruled out. “But not before August 1,” he said.EU trade ministers are scheduled to meet on Monday for a pre-arranged summit and will be under pressure from some countries to implement €21bn ($24.6bn) in retaliatory measures, which are now paused until 1 August, the same day as Trump’s new deadline.Macron has called on the EU to “defend European interests resolutely” in response to Trump’s threats.French cheese and wine producers have warned of the damaging impact that Trump’s threatened 30% tariffs on imports from the EU would have on the country’s agriculture industry.A 30% duty would be “disastrous” for France’s food industry, said Jean-François Loiseau, the president of food lobby group ANIA, while Francois Xavier Huard, the CEO of dairy association FNIL, said: “It’s a real shock for milk and cheese producers – this is an important market for us.”In the interview with ABC News on Sunday, Hassett also said that Trump has the authority to fire the Federal Reserve chair, Jerome Powell, for cause if evidence supports that, adding that the Fed “has a lot to answer for” on renovation cost overruns at its Washington headquarters.Any decision by Trump to try to fire Powell over what the Trump administration calls a $700bn cost overrun “is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed”, Hassett said.Vought, the White House budget director, last week slammed Powell over an “ostentatious overhaul” of the Fed’s buildings and answers to a series of questions. Trump has repeatedly said that Powell should resign because he has not lowered interest rates, and the Wall Street Journal reported this week, citing anonymous sources, that Hassett is vying to succeed him as the Fed chair. More