The latest data shows the U.S. economy is continuing to slide alarmingly, as Alan Austin reports.
Governments dread updates from statutory authorities highlighting a deteriorating economy. In the United States, this concern is palpable under President Donald Trump, who is steering a peculiar course that amalgamates elements of both fascism and socialist interventionism.
Recent economic news out of the U.S. is overwhelmingly negative, a reality emphasized by Trump’s controversial dismissal of senior statistician Erika McEntarfer. She was removed from her position after releasing Bureau of Labor Statistics (BLS) data showing that the U.S. economy added a mere 93,000 jobs in June and subsequently lost 260,000 jobs in July.
Trump responded by accusing McEntarfer of “faking” job numbers for political gain and subsequently filled the BLS position with a staunch supporter. This maneuver has cast a shadow of doubt not only over BLS data but also the integrity of all economic statistics emanating from the United States. The effects are palpable, potentially stifling marginal investments in the American economy and keeping interest rates artificially high, which could make Americans financially worse off in the long run.
Living Costs Sneaking Up
Meanwhile, inflation statistics tell a troubling story. After hovering around a manageable 2.3% in April and May, inflation surged to 2.67% in June and continued its upward trajectory, reaching 2.92% in August. While these figures indicate rising living costs, many speculate that the actual inflation rate could be significantly higher.
GDP Growth Struggling
The Gross Domestic Product (GDP) figures are telling. After exhibiting a declining trend post-2024 elections, annual GDP growth plummeted from 2.7% to 2.5% the quarter prior and down further to 1.99% in the first quarter of this year. Although there was a slight uptick to 2.06% in the second quarter, these growth metrics are historically feeble and signal underlying economic distress.
Employment Going Backwards
Analysts report that the U.S. has witnessed a staggering loss of 501,000 jobs between January and August this year, pushing the unemployment rate from 4.01% to 4.32%. In theory, Trump’s controversial tariff policies were aimed at bolstering local production. However, the realities speak for themselves: manufacturing jobs have dwindled from 12,770,000 at the time of the 2024 elections to 12,722,000 in August—equating to a net loss of 48,000 jobs.
Federal Government Debt
The federal government’s debt trajectory under Trump raises alarms as well. Since he took office, a staggering US$1.303 trillion (approximately AU$1.97 trillion) has been added to the national debt, translating to an additional US$3,750 (AU$5,687) owed by every American citizen, including infants. Today, the total national debt stands at US$37.510 trillion (AU$56.8 trillion), which is roughly US$108,000 for every resident, an unsustainable burden that could have generational implications.
Exports in Reverse
The political landscape has also engendered a downturn in U.S. exports. Averaging US$285.4 billion (AU$432.8 billion) in the three months ending in April, export values plummeted to an average of US$280.2 billion (AU$424.6 billion) in the subsequent three months of May, June, and July. This decline has prompted concerns about the real impact of Trump’s tariffs on international trade.
Stock Exchange Fluctuations
Market sentiment is equally tumultuous, reflecting broader economic anxieties. Investors gauge future earnings potential, and prevailing uncertainties surrounding Trump’s political future—ranging from potential impeachment to health concerns—are weighing heavily on market values. On August 26, speculation regarding Trump’s absence flooded social media, only for the Dow Jones industrial average to skyrocket to new heights before settling back down shortly thereafter.
Global Conditions Propitious for the Prepared
Interestingly, America’s economic challenges do not appear to stem from global market conditions, as similarly situated economies are faring considerably better. Nations such as Denmark, Ireland, Switzerland, and Australia are managing to thrive amidst comparable circumstances.
For instance, Australia recently released figures detailing its stronger-than-expected economic performance, presenting a stark contrast to the current U.S. situation.
The Australian economy showed signs of rebounding, with growth in the June quarter at 0.6%, and an annual increase of 1.82%. Importantly, Australian living costs are also easing with inflation reported at 2.09%—a level much more manageable compared to the rising U.S. figures.
The varying economic policies between the two nations underscore how different leadership can lead to vastly different outcomes. While Australians are managing their finances more effectively, Americans are grappling with a potentially precarious economic landscape.
Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001.
