The U.S. economy is a difficult problem, but these fragments are not suitable

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

They say his tariffs and crackdown risks on immigration could be a reward for the 1970s-style “stagnation” when the oil shock suddenly caused stagnant growth and spiraling prices, except that this crisis would be self-inflicted.

The White House also refuted these concerns firmly, attacking the experts – fired her about the director of the Bureau of Labor Statistics.

Questions about how it will work have put the U.S. central bank in a state of paralysis as it clarifies what happened before it comes up with interest rates before it comes up with the data.

But after weeks of company updates, data on jobs and inflation, we still don’t know.

The labor market clearly sends a worrying signal.

Job creation was barely present in May and June, weak in July, while the ranks of discouraged workers were growing.

The August 1 work report sank the stock market and Trump fell into the tail, prompting him to fire the BLS commissioner.

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

That’s not a consensus.

To be sure, the economy slowed down, growing at a rate of 1.2% per year in the first half of the year, down one percentage point from 2024.

But despite the poor evaluation of some companies, despite weakening consumer spending, it is still more resilient than many people expect.

Stocks quickly resumed their marching after the attack on August 1.

“We continue to work hard to see signs of weakness,” the chief financial officer of JPMorgan Chase, the largest U.S. bank, told investors last month. “Consumers basically seem good.”

This has attracted hope that although the economy was able to surprise people a few years ago through the highest inflation rates since the 1980s and interest rates rose sharply.

On Friday, the U.S. government reported spending for retailers and restaurants rose 0.5% from June to July – spending in June was much more than previously estimated.

“This is not the case for consumers,” wrote Michael Pearce, deputy chief economist at Oxford Economics, who predicts that spending will yield modest gains in the coming months as lower taxes and stock market recovery increases confidence.

“With a slow and resilient real economy, the labor market is unlikely to deteriorate drastically.”

Challenges remain in the coming months.

Currently, families have not seen a dramatic increase in store prices, which may force them to back down.

Consumer prices rose 2.7% in July compared to a year ago, the same as in June.

But many forecasters didn’t expect higher prices to start to emerge until later this year, especially before Trump postponed some of the most radical tariff plans.

Irreplaceable prices, imported staple foods, Like coffee and bananas, it has already jumped up.

Forecasters expect prices to rise in the coming months as companies sell stocks and raise prices before the sale, since they may have more confidence in tariff policies.

That’s why you should focus on the producer price index, which measures wholesale prices ordered by U.S. producers before hitting consumers and provides clues to what’s going to happen.

It accelerated at its fastest speed in more than three years in July.

Worryingly, both consumer and producer inflation suggests that price increases are not limited to commodities, suggesting that stagnant water is likely to be a return on the rise.