The United States economy is currently experiencing a period of modest growth, with the Gross Domestic Product (GDP) expanding at an annual rate of 0.4% this year, a decrease from the previous projection of 1.3%.
In the labor market, job gains have been dwindling, with net hiring plummeting over the last three months. The economy added just 73,000 jobs 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.
Inflation remains a concern, with the consumer price index increasing by 2.8% in February from a year ago, down from 3% the previous month. Core prices, which exclude the volatile food and energy categories, rose 3.1% from a year earlier, down from 3.3% in January. The core figure is the lowest since April 2021.
Trade policies continue to influence the economic landscape. President Trump’s aggressive use of tariffs, executive actions, spending cuts, and tax code changes carry 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.
In summary, while the U.S. economy is not currently in a recession, the impacts of new tariffs and a looming trade war have unsettled financial markets and raised fears of an economic downturn. Even President Donald Trump has said a recession is possible.