Ten indicators of what’s going on with America’s economy

AMERICA’S REMARKABLE run of economic growth may be slowing. Recent data point to weaker output as tariffs, economic uncertainty, curbs on migration and attacks on institutions such as the Federal Reserve take their toll.

The picture may soon become murkier. Staffing cuts at agencies such as the Bureau of Labour Statistics (BLS) already seem to be interfering with the inflation data, which are labour-intensive to compile. The sample for the latest figures was down by well over 15%, according to a BLS report. After a weak jobs report on August 1st, President Donald Trump said he would fire the BLS commissioner responsible—a remarkable act of political interference. Our ten charts below show what can still be gleaned from the data.

GDP figures for the first two quarters of 2025 show that growth has begun to taper off. Tariff front-running muddied trade numbers early in the year, making the headline figures difficult to read. In the first quarter companies rushed goods into America before tariff deadlines. That surge pushed down net exports, which was not fully offset by a rise in inventories (probably because of measurement errors). GDP shrank as a result. That same effect unwound in the second quarter, producing a strong rise from the previous quarter.

One way to cut through that noise is by solely looking at private spending and investment (see right-hand chart). Growth in real final sales to private domestic purchasers (sometimes called core GDP) has remained positive, but has begun to slow sharply in 2025. Weak payroll figures, including sharp downward revisions to the past few months’ data, tell the same story.

Inflation seems to be picking up. The Fed’s preferred measure—the yearly increase in the personal-consumption expenditures price index—rose in June to 2.6%, above the Fed’s target of 2%. (See The Economist’s inflation tracker.)

Prices are, to a large extent, beyond the White House’s direct control (although Joe Biden’s big stimulus in 2021 certainly did not help matters). But Mr Trump’s tariffs are beginning to flow through to goods prices. The Fed looks poised to hold off on big interest-rate cuts until the shape of tariff inflation is clearer.

Despite that gloom, stockmarkets have staged a remarkable recovery from the year’s early volatility. The S&P 500 index of large American firms is back at historic highs. Still, the gains during Mr Trump’s second term have been smaller than in the opening months of recent presidencies, including his first term. And his latest wave of tariffs, announced on July 31st and August 1st, seem to have weighed on sentiment: the S&P 500 closed the week 2.5% lower. Global stockmarkets also fell.

Ordinary Americans are still feeling downbeat. A closely watched index of consumer sentiment, published by the University of Michigan, dipped to its lowest level since mid-2022 after Mr Trump’s tariff announcements in April, and has only rebounded partway. Readings that low have often signalled recessions. Inflation looms especially large as a concern: long-term inflation expectations are running at their highest in decades.Surveys are far from perfect as far as indicators go. Responses to the Michigan questions are heavily coloured by partisan affiliations, with Democrats now much gloomier than Republicans. But other gauges paint a similar picture. An index of consumer sentiment published by the Conference Board, a business-research group, also dropped to its lowest since October 2011, before recovering a little.

If Americans tighten their purse strings, GDP will also contract: consumption accounts for about two-thirds of American GDP. Retail sales are down a little, but still look broadly solid. The question for the coming months is how much further Mr Trump’s trade policies undercut the consumer economy.

The jobs market is looking more fragile. So far unemployment remains low by historic standards and jobless claims have not picked up. But the pace of hiring has slowed sharply, potentially an early warning of trouble ahead.That said, America’s jobs market has proven remarkably resilient to colossal shocks. When the Fed started jacking up interest rates in 2022, many analysts and investors thought that monetary tightening would lead to massive layoffs. Instead, the economy had several buffers: consumers had accumulated ample savings during the pandemic; companies had locked in low financing rates; and there was a boom in AI-related spending. There has also been some anxiety this time around that AI may be destroying entry-level jobs, though this effect is still hard to see in the official figures.

One way of measuring all of this uncertainty is the Economic Policy Uncertainty index. Created by three academic economists, it tracks media coverage, tax policies and disagreements among economic forecasters. It spiked at the height of covid before falling below its long-term average under Mr Biden. Now it is soaring once again, though down a little from April’s peaks. Uncertainty can be a problem in itself, acting as an impediment for both businesses and consumers who face tough decisions. It is hard to commit to a large purchase or investment if the next few months, let alone the next few years, are so hard to predict.

With America’s debt load ballooning, Mr Trump has promised that he will bring down federal spending. He created DOGE with the supposed intention of identifying fraud and waste, and eliminating as much as $2trn a year from the government’s budget. That was always a far-fetched ambition: cuts of that size would exceed the government’s entire discretionary spending. In that sense, it is good to see that Mr Trump is woefully behind on his planned cuts: as measured by cash outflows from the Treasury, spending is running ahead of previous years. Unfortunately, America’s fiscal trajectory remains unsustainable.

For all of the drama and debate surrounding Mr Trump’s policies, it is important to remember that the economy is affected by much more than just the programme of the Oval Office’s occupant. The property market is a crucial determinant of the business cycle, and it responds more to borrowing rates than to any presidential policy. High interest rates are now posing a major headwind. The average interest rate for a 30-year fixed-rate mortgage was 6.81% in April, well above the low rates that had come to seem normal in the decade before covid. Home sales have steadily drifted lower since the covid peaks and, with mortgages staying so expensive, there is probably little relief on the horizon. That will hurt construction activity.

Our final measure is the dollar. Both Mr Trump and J.D. Vance, his vice-president, have argued for a weaker currency, saying that the greenback’s strength is a problem for American industry (because, they say, companies will struggle to sell their products abroad). In a narrow sense, they have scored an early victory here: the dollar has lost ground against most other major currencies since Mr Trump took office. The trouble is that this weakness stems mainly from his policies, especially his ultra-aggressive trade tactics. As investors question America’s stability, the risk is that they reduce their appetite for American assets and, by extension, the dollar. A weaker dollar could end up adding to inflation pressures by driving up the cost of imported goods.

Just a few months ago many investors were convinced that Trumponomics would energise America’s business environment by cutting red tape and making it a more attractive destination for foreign capital. But the story of his first six months in office is how much his agenda has been consumed by his chaotic tariffs, a war on the civil service and attacks on the Fed. The dangers of his approach are starting to percolate into the economic data.