They used to be on top of the world. Now, they're the center of the jobs apocalypse... and it's upending society
Shocking new figures reveal that unemployment among recent male college graduates has soared to seven percent.
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The Guardian
25 minutes ago
- The Guardian
Good, mad and ugly: the US economy's performance under Trump
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. On 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'. Delve 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. This 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. Data 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.
The Guardian
26 minutes ago
- The Guardian
Europe's trade deal with the US was dead on arrival – it needs to be buried. Here's how to do it
Ursula von der Leyen's Turnberry golf course deal has been rightly called a capitulation and a humiliation for Europe. Assuming such an accord would put an end to Donald Trump's coercion and bullying was either naive or the result of a miserable delusion. The EU should now steel itself and reject the terms imposed by Trump. Is this deal really as bad as it sounds? Unfortunately, it is, for at least three reasons. The blow to Europe's international credibility is incalculable in a world that expects the EU to stand up for reciprocity and rules-based trade, to resist Washington's coercion as Canada, China and Brazil have, rather than condoning it. Economically, it's a damaging one-way street: EU exporters lose market access in the US while the EU market is hit by more favoured US competition. Core European industrial sectors such as pharma and steel and aluminium are left by the wayside. The balance also tilts in the US's favour in important sectors such as consumer goods, food and drink, and agriculture. Tariffs tend to stick, so this is long-term damage. The EU even gives up its right to respond to future US pressures through duties on digital services or network fees. To top it off, von der Leyen's defence and investment pledges (for which she had no mandate) go against Europe's interest. The EU's competitiveness predicament is precisely one of net investment outflows. As international capital now reallocates under the pressures of Trumponomics and a weakening dollar, the case for Europe to become a strategic investment power was strengthening. Von der Leyen's promise of $600bn in EU investment in the US is therefore disastrous messaging. How could this happen? All EU member states wanted to avoid Trump's 30% tariff threat and a trade war, but none perhaps as much as Germany and Ireland, supported by German carmakers and US big tech firms. Yet Irish sweetheart digital tax deals, as well as BMW and Mercedes's plans to move production hubs to the US (also to serve the EU market), cannot be Europe's future. EU governments were distinctly unhelpful in building the EU's negotiating position. But in the end, it was von der Leyen who blinked and she has to take responsibility. Her close team took control in the closing weeks and went into the final meeting manifestly prepared only to say yes, which made Trump's steamrolling inevitable. Let's think of the counterfactual: if von der Leyen had stepped into the room and rejected these terms, Trump's wrath and some market turmoil may have ensued. But ultimately it would very likely have come to a postponement, a new negotiation and, at some point, a different deal that would not be so lopsided or unilaterally trade away deep and long-term European interests and principles. Instead, von der Leyen became a supplicant to a triumphant Trump. The situation is reminiscent of the final rounds of the Brexit negotiations five years ago when von der Leyen similarly was giving in to unacceptable demands from Boris Johnson, only to U-turn under pressure from a steelier EU chief negotiator and a quartet of member states. Today, von der Leyen runs Brussels with a strong presidential hand and has largely done away with internal checks and balances inside the commission. That is her prerogative and her style, but the upshot should not be weak, ineffective and unprincipled dealings on Europe's major geopolitical challenges, from Trump to Gaza. The 'deal' in Scotland is in reality an unstable interim accord. Nothing is yet inked or signed; Washington and Brussels are already locking horns on its interpretation and negotiations on the finer (and broader) points are ongoing. The 27 EU governments will inevitably get involved as the final deal needs to be translated into an international agreement and EU law. Some big powers – Germany and Italy seemingly – are on board, reluctant or not. However, internal political dynamics may change their calculations. Opposition parties and rightwing contenders who are a real political threat to leaders in Germany and France are already lambasting the deal. Unless von der Leyen strikes a dirty bargain with the member states, the European parliament will also have a say. The longtime chair of its trade committee, Bernd Lange, has set the tone for how the deal would be viewed there, calling it 'asymmetry set in stone' and even 'a misery'. As details seep out on what von der Leyen has really agreed to and what the US expects from the EU, and all the consequences become clear, an already unpalatable deal may become even more so. Weakening US economic data and returning stock market jitters show that Trump's negotiation footing is fragile. His new tariff threats come with new extensions, up to 90 days in the case of Mexico, as his position is overstretched. For Europe, the lesson from the Brexit negotiations – one that von der Leyen ought to have grasped before now – is that nothing is agreed until everything is agreed. There is now an opportunity for EU governments and the European parliament to course correct and salvage something from this train wreck. Georg Riekeles is the associate director of the European Policy Centre, and Varg Folkman is policy analyst at the European Policy Centre
Reuters
an hour ago
- Reuters
India will buy Russian oil despite Trump's threats, NYT reports
Aug 2 (Reuters) - Indian officials have said they would keep purchasing oil from Russia despite the threat of penalties that U.S. President Donald Trump said he would impose, the New York Times reported on Saturday. Reuters could not immediately verify the report.
