U.S. Economy a Puzzle with Pieces that won’t Fit Together

Ask almost any economist and they’ll tell you: U.S. President Donald Trump has been taking risks with the world’s largest economy.

The August jobs report sent the stock market plunging and Trump into a tailspin, prompting him to fire the BLS commissioner.

They warn that his tariffs and crackdown on immigration could trigger a return of 1970s-style “stagflation,” when a sudden oil shock caused stagnant growth and spiraling prices — except this time, the crisis would be self-inflicted, Natalie Sherman reported for BBC News.

The White House has just as firmly dismissed those concerns, attacking the experts — and, in the case of the U.S. Bureau of Labor Statistics (BLS) commissioner, firing her.

Uncertainty over how the situation will unfold has left the U.S. central bank in a state of paralysis, waiting for clearer data before making a move on interest rates. But after weeks of company updates, jobs numbers, and inflation data, there are still no easy answers.

The labor market is flashing warning signs. Job creation was almost non-existent in May and June, sluggish in July, and the number of discouraged workers is rising.

The August 1, 2025, jobs report sent the stock market plunging and Trump into a tailspin, prompting him to fire the BLS commissioner.

A few days later, Moody’s Analytics economist Mark Zandi declared on social media that the economy was “on the precipice of a recession.”

That’s not the consensus view.

The economy has certainly slowed — growing at an annual rate of 1.2% in the first half of the year, down one percentage point from 2024. But consumer spending, while weakening, has held up better than many expected, despite gloomy forecasts from some firms.