One Year of Trumponomics
What have we learned?
Source: BLS
Note to subscribers: Last Sunday I said that today’s primer would finish my series on China’s trade surplus with a discussion of policy responses. But I’m going to postpone that post until next week, partly because I’m still working on some issues, partly because new data make this a good time to talk about how Trump’s economic policy is playing out.
Warning: This post contains a lot of charts.
Donald Trump is president again for one main reason: He promised a new age of American prosperity with lower prices, a shrinking federal deficit, and a resurgence in manufacturing jobs. Enough voters believed his promises to swing the 2024 election. But many of them are disillusioned now. Trump insists that he is actually delivering on his campaign promises, claiming that we have a “hot” economy. But voters don’t agree: Consumer confidence is low and Trump’s approval rating on handling the economy, which was strongly positive last January, is now strongly negative.
On Friday we received the final jobs report for 2025, so now is a good time to take stock of the results so farand assess how well Trumponomics is actually working. Let me not be coy: This is not a hot economy, by any objective measure. Granted, the U.S. economy isn’t falling off a cliff either. In fact, what we’re seeing isn’t a classic recession; it’s more a sort of creeping malaise.
In what follows I’ll try to keep it cool. Everyone knows my political views, but this will be a fact-based primer, not a polemic.
Beyond the paywall I’ll address the following questions:
1. How is the U.S. economy doing?
2. Why does the labor market feel so bad?
3. What is the stock market telling us about the economy?
4. How does economic performance so far compare with expectations?
5. Why aren’t we doing better?
6. Why aren’t we doing worse?
7. What will come next?
