It's Trump's economy now. The latest financial numbers offer some warning signs
Job gains are dwindling. Inflation is ticking upward. Growth has slowed compared with 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.
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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The Mainichi
4 hours ago
- The Mainichi
From Laos to Brazil, Trump's tariffs leave a lot of losers. But even the winners will pay a price
WASHINGTON (AP) -- President Donald Trump's tariff onslaught this week left a lot of losers -- from small, poor countries like Laos and Algeria to wealthy U.S. trading partners like Canada and Switzerland. They're now facing especially hefty taxes -- tariffs -- on the products they export to the United States starting Aug. 7. The closest thing to winners may be the countries that caved to Trump's demands -- and avoided even more pain. But it's unclear whether anyone will be able to claim victory in the long run -- even the United States, the intended beneficiary of Trump's protectionist policies. "In many respects, everybody's a loser here,'' said Barry Appleton, co-director of the Center for International Law at the New York Law School. Barely six months after he returned to the White House, Trump has demolished the old global economic order. Gone is one built on agreed-upon rules. In its place is a system in which Trump himself sets the rules, using America's enormous economic power to punish countries that won't agree to one-sided trade deals and extracting huge concessions from the ones that do. "The biggest winner is Trump," said Alan Wolff, a former U.S. trade official and deputy director-general at the World Trade Organization. "He bet that he could get other countries to the table on the basis of threats, and he succeeded -- dramatically.'' Everything goes back to what Trump calls "Liberation Day'' -- April 2 -- when the president announced "reciprocal'' taxes of up to 50% on imports from countries with which the United States ran trade deficits and 10% "baseline'' taxes on almost everyone else. He invoked a 1977 law to declare the trade deficit a national emergency that justified his sweeping import taxes. That allowed him to bypass Congress, which traditionally has had authority over taxes, including tariffs -- all of which is now being challenged in court. Winners will still pay higher tariffs than before Trump took office Trump retreated temporarily after his Liberation Day announcement triggered a rout in financial markets and suspended the reciprocal tariffs for 90 days to give countries a chance to negotiate. Eventually, some of them did, caving to Trump's demands to pay what four months ago would have seemed unthinkably high tariffs for the privilege of continuing to sell into the vast American market. The United Kingdom agreed to 10% tariffs on its exports to the United States -- up from 1.3% before Trump amped up his trade war with the world. The U.S. demanded concessions even though it had run a trade surplus, not a deficit, with the UK for 19 straight years. The European Union and Japan accepted U.S. tariffs of 15%. Those are much higher than the low single-digit rates they paid last year -- but lower than the tariffs he was threatening (30% on the EU and 25% on Japan). Also cutting deals with Trump and agreeing to hefty tariffs were Pakistan, South Korea, Vietnam, Indonesia and the Philippines. Even countries that saw their tariffs lowered from April without reaching a deal are still paying much higher tariffs than before Trump took office. Angola's tariff, for instance, dropped to 15% from 32% in April, but in 2022 it was less than 1.5%. And while Trump administration cut Taiwan's tariff to 20% from 32% in April, the pain will still be felt. "20% from the beginning has not been our goal, we hope that in further negotiations we will get a more beneficial and more reasonable tax rate," Taiwan's president Lai Ching-te told reporters in Taipei Friday. Trump also agreed to reduce the tariff on the tiny southern African kingdom of Lesotho to 15% from the 50% he'd announced in April, but the damage may already have been done there. Bashing Brazil, clobbering Canada, shellacking the Swiss Countries that didn't knuckle under -- and those that found other ways to incur Trump's wrath -- got hit harder. Even some poorer countries were not spared. Laos' annual economic output comes to $2,100 per person and Algeria's $5,600 -- versus America's $75,000. Nonetheless, Laos got rocked with a 40% tariff and Algeria with a 30% levy. Trump slammed Brazil with a 50% import tax largely because he didn't like the way it was treating former Brazilian President Jair Bolsonaro, who is facing trial for trying to lose his electoral defeat in 2022. Never mind that the U.S. has exported more to Brazil than it's imported every year since 2007. Trump's decision to plaster a 35% tariff on longstanding U.S. ally Canada was partly designed to threaten Ottawa for saying it would recognize a Palestinian state. Trump is a staunch supporter of Israeli Prime Minister Benjamin Netanyahu. Switzerland was clobbered with a 39% import tax -- even higher than the 31% Trump originally announced on April 2. "The Swiss probably wish that they had camped in Washington'' to make a deal, said Wolff, now senior fellow at the Peterson Institute for International Economics. "They're clearly not at all happy.'' Fortunes may change if Trump's tariffs are upended in court. Five American businesses and 12 states are suing the president, arguing that his Liberation Day tariffs exceeded his authority under the 1977 law. In May, the U.S. Court of International Trade, a specialized court in New York, agreed and blocked the tariffs, although the government was allowed to continue collecting them while its appeal wend its way through the legal system, and may likely end up at the U.S. Supreme Court. In a hearing Thursday, the judges on the U.S. Court of Appeals for the Federal Circuit sounded skeptical about Trump's justifications for the tariffs. "If (the tariffs) get struck down, then maybe Brazil's a winner and not a loser,'' Appleton said. Paying more for knapsacks and video games Trump portrays his tariffs as a tax on foreign countries. But they are actually paid by import companies in the U.S. who try to pass along the cost to their customers via higher prices. True, tariffs can hurt other countries by forcing their exporters to cut prices and sacrifice profits -- or risk losing market share in the United States. But economists at Goldman Sachs estimate that overseas exporters have absorbed just one-fifth of the rising costs from tariffs, while Americans and U.S. businesses have picked up the most of the tab. Walmart, Procter & Gamble, Ford, Best Buy, Adidas, Nike, Mattel and Stanley Black & Decker, have all hiked prices due to U.S. tariffs "This is a consumption tax, so it disproportionately affects those who have lower incomes,'' Appleton said. "Sneakers, knapsacks ... your appliances are going to go up. Your TV and electronics are going to go up. Your video game devices, consoles are going to up because none of those are made in America.'' Trump's trade war has pushed the average U.S. tariff from 2.5% at the start of 2025 to 18.3% now, the highest since 1934, according to the Budget Lab at Yale University. And that will impose a $2,400 cost on the average household, the lab estimates. "The U.S. consumer's a big loser," Wolff said.
Japan Times
5 hours ago
- Japan Times
How Trump is gaslighting the climate — with Japan's help
Nestled among the bold characters of headlines about freshly signed U.S. trade deals are equally bold numbers: $550 billion, $250 billion, $100 billion. These are some of the eye-watering figures that countries have promised to invest in or buy from the United States' energy sector — primarily its fossil fuel industry — as part of the agreements. Whether such large amounts of money will actually be pumped into the U.S. economy is yet to be seen, but in the meantime, U.S. President Donald Trump is living up to his promise to 'drill, baby, drill' by aggressively promoting America's energy resources, especially natural gas. Increasing the United States' oil and gas production means it can rely on these as cheap energy sources domestically while also selling them abroad to reduce its trade deficit with other countries — so the MAGA argument goes. Major environmental concerns about boosting this industry aside — particularly given the country's status as the top emitter of methane from oil and gas production — the economic case is also far from clear. Increased American gas exports, most of which are traded abroad via ship as liquefied natural gas (LNG), could push up domestic energy prices at a time when households are already feeling the pain of high living costs. Plus, as the world gears up for an unprecedented increase in LNG export capacity, many believe that global supply will outstrip demand, which is falling in major markets such as Japan and Europe and may not grow as much as the industry hopes in emerging economies such as China and India. With its LNG export capacity set to triple, accounting for one-third of the global total by 2030, the U.S. needs buyers. This is where Trump's leverage tactics come in handy as Washington pushes America's trading partners — including Japan — to buy more U.S. gas in exchange for more lenient tariffs. The question of Asia's gas needs also hangs over what U.S. President Donald Trump hopes will become the crown jewel of American energy dominance: Alaska LNG. | Reuters In February, Trump said Japan would start importing 'record numbers' of American LNG. While the president's hyperboles should be taken with a comparably large grain of salt, Japanese companies have indeed been buying more of the fuel this year, on top of already sizable contracts and investments. Japanese banks are the top three financiers of LNG export projects in the U.S. Jera, Japan's largest power generator and one of the biggest LNG importers globally, has increased the U.S. share of its gas mix from 10% to nearly 30%. On July 22, as the ink on the U.S.-Japan trade deal was still drying, Trump said Japan had agreed to form a joint venture to develop an LNG project in Alaska, without specifying which project. The details of any potential venture remain unclear. But the reality for those living at the heart of the American LNG buildout, in the coastal communities of Texas and Louisiana that look out on to the Gulf of Mexico, is one of diminishing returns. Having already suffered the brunt of decades of oil, gas and petrochemical development — including a boom in LNG export facilities in the wake of the 2016 U.S. shale gas revolution that transformed the country from a net gas importer into the world's No. 1 exporter — their health, livelihoods and environment are at stake as more facilities are due to come online. 'Paying for, financing, funding and insuring these projects is ensuring my children's deaths,' says Roishetta Ozane, founder of the Vessel Project of Louisiana, a disaster relief and environmental justice organization, and co-director of the Gulf South Fossil Finance Hub, who lives in Sulphur, Louisiana. Ozane's six children suffer from ailments including skin, respiratory and neurological disorders. Near where her family lives, CP2 LNG, a planned LNG export facility, reached a final investment decision — a key milestone for large energy projects — last month, thanks in part to a political and regulatory environment that is proving to be as accommodating to fossil fuel development as it is hostile to climate policies and renewable energy. Redrawing the energy map The U.S. government is doing everything in its power to move gas projects ahead, with Trump kicking off a wave of environmental deregulation and oil and gas permitting. On his first day back in office, the president signed an executive order called Unleashing American Energy, undoing predecessor Joe Biden's investments in clean energy and electric vehicles and boosting production of oil and gas — the 'liquid gold under our feet,' as Trump called it in his inaugural address. Fishing boats in the Calcasieu Ship Channel, which connects Lake Charles, Louisiana, with the Gulf of Mexico. Since Calcasieu Pass LNG started production in 2022, catches of shrimp, crabs and fish have decreased dramatically year after year, local fishers say. | Mara Budgen Soon after, Washington established the National Energy Dominance Council, headed by Interior Secretary Doug Burgum and Energy Secretary Chris Wright, a fracking millionaire. The One Big Beautiful Bill Act, the gargantuan Republican spending legislation adopted in July, incentivizes oil and gas leasing, including by lowering federal royalties rates, and repeals a fee on methane emissions. Trump also lifted a moratorium on permits for new LNG export facilities that was adopted by Biden in January 2024. Among such facilities, CP2 LNG, located in the Calcasieu Ship Channel in Cameron Parish, Louisiana, has received federal approval; if constructed, it would put the company that owns the project, Venture Global, in the lead as the United States' biggest LNG exporter. LNG has also become a major bargaining chip in Trump's trade wars. While this isn't the first U.S. administration to use the fuel as a geopolitical tool, 'Trump has taken a sticks, not a carrot approach' like others before him, says Sam Reynolds, a research lead at the U.S.-based Institute for Energy Economics and Financial Analysis (IEEFA). This push 'has been largely successful' as Asian, European and Middle Eastern buyers sign on to purchase more American gas. 'The administration is trying to redraw the map of energy dependence,' says Reynolds, though the growing competitiveness of renewable energy globally 'will challenge what the U.S. can feasibly achieve by doubling down on fossil fuels.' Footing the bill On an early morning in mid-July, Ray Mallet is on his boat in the Calcasieu Ship Channel, where CP2 LNG is being built, on the coast of the Gulf of Mexico — waters he knows well, having worked there as a commercial fisher all his life. But on this day, Mallet isn't casting his nets and lines as usual. Together with other fishers, as well as scientists and local environmentalists, he's deploying hydrophones in the water to test whether noise pollution from the Calcasieu Pass LNG export terminal, which sits where the channel meets the gulf, is causing a severe decline in seafood catch rates. U.S. President Donald Trump holds a joint press conference with Prime Minister Shigeru Ishiba at the White House in Washington on Feb. 7. | Reuters The hydrophones are being used to scientifically verify what local fisherfolk already 'know and see,' says Alyssa Portaro, founder of the Habitat Recovery Project, a Louisiana-based conservation nonprofit that is running the data collection project: Since Calcasieu Pass LNG started production in 2022, catches of shrimp, crabs and fish have decreased dramatically year after year. 'I've had to go fish elsewhere to try to support my family,' Mallet says. Anthony Theriot, known as 'Tad,' who lives a little over 1.5 kilometers from Calcasieu Pass LNG, has also been fishing here his whole life. Shrimpers and fishers used to make a good living, he says, but income has declined sharply since the plant started. 'This was the No. 1 seafood capital of the U.S. and now it's the world capital of LNG exports,' says Portaro. What is happening in Cameron Parish mirrors conditions across the Gulf Coast. Existing socioeconomic disparities are being exacerbated as American LNG facilities 'tend to be sited in areas that are disproportionately home to communities of color and low-income communities,' according to a U.S. Department of Energy (DOE) study on the impacts of U.S. LNG exports that was mandated by the Biden-era moratorium. But the consequences may be felt further afield: The U.S. Energy Information Administration expects domestic gas prices to more than double through 2026 compared with last year and the DOE study finds that increasing LNG exports will lead to higher electric bills. Rising prices are also a concern for the industry as the cost of building LNG plants has soared, compounded by 50% U.S. tariffs on imported steel and aluminium. Among those caught in the fallout is a major Japanese engineering, procurement and construction contractor, Chiyoda Corp., which in July stated that it will stop pursuing large-scale LNG projects overseas due to losses incurred from some U.S. facilities. Ultimately, international buyers will foot at least part of the bill. 'U.S. LNG prices abroad are based on that domestic gas price as well as the capital expenditure of the facilities and both of those are rising,' says IEEFA's Reynolds. In signing up for more American gas, Japan is 'essentially committing over the long term to pay more for LNG.' Unleashing a carbon bomb? The world's top LNG players, including Japan, are predicting high prices and high demand for the fuel, especially in Asia, over the next couple of decades. Yet many others foresee a glut in the market, with expected amounts of additional LNG supply above the level of demand in developing parts of Asia, according to Anne-Sophie Corbeau, global research scholar at Columbia University's Center on Global Energy Policy. 'There is a reasonable question about where all this LNG is going to go,' Corbeau says. Reynolds points, for example, to the industry's overly optimistic predictions about China. While it is the world's largest buyer of LNG, having surpassed Japan in 2021, its imports haven't grown significantly since then, in part due to a record-breaking adoption of renewable energy. In Japan, gas demand is declining year after year, though according to the economy ministry, predicting future trends is difficult given the advent of new industries and technologies. This means preparing for several scenarios, including one in which electricity demand increases due to the growth of artificial intelligence, among other factors, but energy sources such as renewables are deployed slowly. The government envisions a significant reduction of thermal power — including coal and gas — in Japan's energy mix, but continues to set high targets for how much LNG its companies should contract. A children's playground next to the Freeport LNG export terminal in Texas. Existing socioeconomic disparities are being exacerbated as American LNG facilities 'tend to be sited in areas that are disproportionately home to communities of color and low-income communities,' according to a U.S. Department of Energy study. | Mara Budgen What LNG isn't needed domestically is increasingly being resold to countries in South and Southeast Asia. The question of Asia's gas needs also hangs over what Trump hopes will become the crown jewel of American energy dominance: Alaska LNG. The project entails building a 1,300-kilometer north-south pipeline to transport gas across the largest U.S. state. From the south coast, LNG would be shipped to Asia via a much shorter route than that from the Gulf Coast — for example, gas would reach Japan in around 10 days rather than the typical 30 to 40 days. Despite being under discussion for decades, Alaska LNG has never been developed due to the huge cost of building and operating a pipeline in the state's harsh geographic and climatic conditions. In 2016, energy consultancy Wood Mackenzie called it 'one of the least competitive' LNG projects in the world. Estimated to cost $44 billion — proportionally double the price of LNG export projects in the Gulf Coast — additional expenses, such as those incurred from the new tariff regime, haven't even been factored in yet, Reynolds points out. Alaska LNG has signed a nonbinding agreement with a Thai buyer and received interest from Indian, Taiwanese and South Korean players as well as Japanese companies such as Jera, Tokyo Gas and Mitsui. In contrast, the president of Japan Petroleum Exploration told Reuters in February that Alaska LNG 'is not a realistic investment proposition due to its unclear economics and large scale.' 'If it has not taken a final investment decision, there is a very simple reason for that — economics,' Corbeau says. Chris Wright, U.S. energy secretary, speaks during a conference in February. | Eric Lee / The New York Times Climate concerns also loom large when it comes to Alaska LNG — labeled a 'carbon bomb' by environmental groups — and other such developments. As global demand for oil collapses, gas is the fossil fuel industry's last frontier. To some, this is good news, as gas emits less carbon dioxide than coal and oil when burned and can keep the lights on as societies transition to less carbon-intensive energy systems. Others are concerned that investments in gas compete with those in renewables — a fact also highlighted by the DOE study — while experts note that lower carbon dioxide emissions does not mean it is a clean alternative, particularly because of the significant amount of methane emitted along the value chain. 'It's like you're trying to eat a healthier diet and instead of eating cookies, you're going to eat candy,' says Allie Rosenbluth, U.S. campaign manager at U.S.-based nonprofit Oil Change International. Why not 'try an apple'? Some Gulf Coast communities are taking matters into their own hands. Melanie Oldham, founder and director of environmental justice organization Better Brazoria, lives a few kilometers from the Freeport LNG export facility in Freeport, Texas. Her community has started recording methane emissions from the plant using an optical gas imaging camera so that 'people can see that we're telling the truth' about LNG pollution, Oldham says. While climate skeptics such as Wright — Trump's energy secretary, who has described concerns about climate change as a 'mania' — are too vocal a contingent in the U.S. government, Oldham urges 'decision-makers in Europe and Asia (to) take a look at the whole picture.' 'People know that these projects are not a done deal,' says Rosenbluth. 'They need local and state permits. They need financiers, they need actual buyers, and many of these projects do not have all of those things.'
Japan Times
5 hours ago
- Japan Times
Trump's economic agenda is losing support, but Democrats see few gains
U.S. voters are increasingly souring on President Donald Trump's handling of the economy, according to a raft of new polling, but that disapproval still isn't translating into a political windfall for Democrats. Just 37% of voters approve of Trump's approach to the economy as of July, according to Gallup polling, down from 42% in February 2025. While Republicans still strongly back the president, the bulk of the drop comes from falling support among independents — less than a third of whom now think he's doing a good job. This new polling from Gallup, plus similar findings from the Wall Street Journal, CBS News and others, highlights the potential warning signs for both political parties heading into the 2026 midterms. For Trump, an economy he has openly celebrated is flashing warning signs, including in hiring data. A slower-than-expected jobs report Friday sparked a furious backlash from the president, who questioned without evidence whether the numbers had been politically manipulated and fired the head of the Bureau of Labor Statistics. Democrats looking to retake the House of Representatives need to convince voters they can be trusted on issues like fighting inflation, bringing down the cost of housing and creating new jobs for the working class — messages Democrats failed to adequately convey during the 2024 presidential election. Yet even while voters express some skepticism of Trump's agenda on both questions, a recent Wall Street Journal poll showed they trust Republicans more than Democrats to tackle both inflation and tariffs — even though Republicans in Congress have nearly unanimously voted to back the president's policies. The same poll showed 63% of voters hold an unfavorable view of Democrats overall — double the amount (30%) who hold a favorable view. "Trump's support on the economy is eroding, but Democrats are not gaining in kind,' said Lanae Erickson, senior vice president for social policy, education and politics at Third Way. "Even on things Trump is underwater on, like tariffs, voters are blaming Trump but not Republicans broadly.' Republicans have their own set of challenges, as they too plan to center their midterm message on the state of the economy. Trump likes to talk about the way America has entered a so-called golden age, pointing to stock market gains, but data show a more mixed picture of the overall economy. While layoffs remain low, hiring has slowed. Employment growth has averaged just 35,000 jobs in the past three months, according to the Bureau of Labor Statistics, the worst since the pandemic. Friday's jobs report — which preceded Trump's social media outburst — showed payrolls up 73,000 in July while the prior two months were downgraded by nearly 260,000. What's more, tariffs threaten to raise consumer prices, even if the impact has been limited so far, and company earnings are expected to clock in a lowest amount in the last two years. "Running an inflationary trade war is probably not smart politics,' said Michael Strain, director of Economic Policy Studies at the American Enterprise Institute. "It's a big gamble that the trade war won't result in inflation.' Trump's signature legislative accomplishment, the sweeping tax, budget and health care law he calls the "One Big, Beautiful Bill,' also remains unpopular with a huge swath of voters. Some 46% of adults say the tax legislation will hurt their families, while 28% do not expect to be affected, according to polling from the Kaiser Family Foundation. That's a problem the party will need to overcome, if it's meant to serve as a cornerstone of its accomplishments in Trump's first year. It also echoes a problem Democrats never found a way to solve with former President Joe Biden's signature bills, an infrastructure package and a climate and tax law that were largely ignored by voters in 2022, when Republicans narrowly won control of the House. Barack Obama's signature legislation, the Obamacare health care law, became so politically toxic that it helped Republicans sweep to a more than 60-seat gain in the 2010 House elections in what became known as the Tea Party wave on promises to repeal it. The law, which recovered in political popularity over subsequent years as its effects began to take hold, has mostly survived. To hold onto the House, Republicans will need the support of independents and non-MAGA Republicans. Trump's support appears to be softening with both groups. A recent Gallup poll showed some movement toward Democrats as Trump began implementing his economic agenda. By a narrow margin — 46% to 43% — voters said they leaned more toward the Democratic Party than the Republican Party in the second quarter of 2025. That's a reversal from the last quarter before Trump took office, when Democrats trailed Republicans by a nearly identical margin, 43%-47%. Democrats say they plan to capitalize on voters' uneven view of the economy, by building their midterm message on the issue of affordability. "Folks are struggling to limit the cost of housing, food, child care, health care, energy costs — and that was the big promise Republicans made, that they were going to lower costs on Day 1. They are absolutely not focused on that at all,' said Rep. Suzan DelBene, chair of the Democratic Congressional Campaign Committee at a recent gathering with reporters. "Their focus is on helping the wealthiest and well-connected.' That focus would be a change from 2024, when the party was torn on whether to emphasize an economic message, or to talk about the threat they believed Trump posed to democracy. Kamala Harris toggled between the two ideas during the final sprint of her campaign. Yet Trump's signature style is to move so fast and on so many fronts, from immigration to foreign policy, that Democrats have struggled to stay on an economic message. Issues like Israel and Gaza have exposed rifts among Democrats that Republicans, largely united behind the president, are eager to exploit. In recent days, Democrats have also seized on stories about Trump's connections to the late disgraced financier Jeffrey Epstein, sensing a vulnerability for the president's party on that story among independent voters. Historically, Republicans have held the advantage on being the party most trusted to handle the economy and that's something Democrats will have to try to overcome in both the midterms and in the 2028 presidential race. When Trump lost in 2020 and Biden prevailed, political pundits attributed those election results to the aftermath of the once-in-a-century pandemic — not any increased confidence in Democrats' ability to manage the economy. Trump — who, at one point, had suggested Americans could inject bleach into their bodies to fight COVID-19 — had lost voters' trust to handle a massive health care crisis that had upended American life. Then, once he was in office, Biden lost trust. The return to normalcy and stable leadership promised by his campaign collapsed in the messy U.S. exit from Afghanistan, and his approval ratings never recovered. Americans broadly didn't buy the idea that the economy was in good shape overall, and weren't swayed when he and his aides tried to convince Americans that soaring post-COVID inflation was only temporary. "The American people rendered a pretty clear judgment,' AEI's Strain said, speaking about one of the challenges Democrats face for the midterms. "They held President Biden responsible for the inflation we experienced in 2021 and 2022 and that is still fresh in people's mind.'
