The us economy is a puzzle but the pieces are fitting toge

Ask almost any economist and they will tell you: Us President Donald Trump has been running risks with the world’s largest economy.

They say his tariffs and crackdown on immigrants Return of 1970s-SQue “Stagflation”, When a Sudden Oil Shock Prompted Stagnant Growth and Spiralling Prists, Excipt this time Be Self-Inflicted.

The white house has just as steadfastly disasseed that concerns, attacking the experts – and in the case of the US Bureau of Labor Statistics Commissioner, Firing Her.

Questions about how it will all play out have left

But after a business few weeks of company updates, data on jobs and inflation, we still don’t get really known.

The labour market is sending clearerly worrisome Signals.

Job creation was almost non-expected in May and June, Sluggish in July, and the ranks of discoured Workers are growing.

That 1 August Jobs Report Sent the Stock Market Sinking and Trump ITO 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.

For sure, the economy has slowed, growing at an annual rate of 1.2% in the first half of the year, down one percented point from 2024.

But consumer spending, despite weakening, has styed more resilient than many had expected, despite downbeat assessments by firms.

Shares, after the 1 August Hit, Quickly resumeed their upward March.

“We Continue to Struggle to see signs of weight,” The Chief Financial Officer of JPMORGAN Chase, America’s Biggest Bank, Told Investors Last Month. “The consumer basically seems to be fin.”

That Has Raised Hopes that Economy Might Power Through, as it did a more years ago, to widespread surprise, despite Getting hit with with the Highest Inflation Since the 1980s and a Sharp Rise in Interest Rates.

On Friday, the US government reported that spending at retailers and restaurants rose 0.5% from june to july – and that spending in june haded in stronger than previous estimated.

“Consures are down but not out,” Wrote Michael Pearce, Deputy Chief Us Economist at Oxford Economics, which is preceding a modest recover in spending in the monts ahead, aS tax cuts and a stocker Market Recovery Boost Confidence.

“With the sluggish Yet Resilient Real Economy, The Labor Market is unlikely to deterirate sharply.”

Challenges remain in the months ahead.

For now, households haven a dramatic run-up in price at the store that might for them to cut back.

Consumer price rose 2.7% in July compared with a year ago, the same pace as in June.

But many forecasters had not expected Higher prices to start appearing until laater this year, especially after trump delayed some of his most agangressive tarif plans until this month.

Price for hard-to-substute, imported staples, Like coffee and bananas, have alredy jumped.

Forecasters Expect Price Increases to Widen in the Months Ahead, AS FIRMS Sell Down Pre-Tariff Stock and Raise Prisies, Now that they have more confidence about what the tariffs have been.

That’s why there was so much focus on the producer price index, which measuresa wholesale prices commanded by us producers before they Hit Consures, Offering a clue to what.

It accelerated at the fastest pace in more than three years in July.

And worryingly, both consumer and producer inflation show the uptick in price is not limited to goods, suggesting stagflation might very well be staging a return.