The US economy is facing major headwinds, with the job market showing signs of strain despite low unemployment rates. A new recession appears to be looming, fueled by escalating trade tensions and rising tariffs.
The Commerce Department reported an annual GDP growth rate of 3%, but business investment slowed down, sparking concerns about inflation and the potential for a price surge. The Federal Reserve kept its benchmark interest rate unchanged, but this decision drew criticism from President Trump, who has been pushing for lower rates to boost economic growth.
Meanwhile, tech stocks surged on Wall Street due to the artificial intelligence boom, which is also driving demand for AI-focused companies like Microsoft and Meta. However, these gains were short-lived, as the president’s latest move – imposing new tariffs on multiple trading partners – sent shockwaves through global markets.
The Bureau of Labor Statistics reported a significant decline in jobs for May and June, with the economy adding just 73,000 new jobs in July. This data has raised concerns about a potential recession, with many economists warning that the current economic trends are troubling.
President Trump’s response to this news was unexpected – he announced plans to fire the head of the Bureau of Labor Statistics, citing errors in the job data and accusations of manipulation prior to the 2024 election. This move has sparked outrage among experts, who warn that it undermines the credibility of government institutions and risks lowering the US to a level similar to authoritarian regimes.
As the economy continues to grapple with uncertainty and volatility, it remains to be seen whether President Trump’s policies will ultimately drive growth or lead to recession.
Source: https://www.nbcnews.com/business/economy/us-economy-explainer-this-week-tariffs-jobs-inflation-what-to-know-rcna222569