WASHINGTON, D.C. — The U.S. economy has weathered major policy and geopolitical shocks during the first 18 months of President Donald Trump’s second term, but several of his central economic promises remain unfulfilled.
Trump ran on lowering prices, bringing back manufacturing, and raising middle-class living standards by using tariffs and cracking down on immigration. In reality, the economy held up better than some experts expected, even with the added problems from the war with Iran.
But jobs and labor force participation have dropped, even after adjusting for population changes. Fewer immigrants, more deportations, and an older population mean there are simply not enough workers.
Manufacturing jobs have gone down since Biden left, even though Trump promised to bring them back. Construction jobs are up, but that is mostly because of big spending on AI data centers.
Inflation is still above the Fed’s 2% goal. Tariffs, higher oil prices, and demand from AI are making things worse. People’s real incomes are flat, and high mortgage rates and home prices are making it harder for most to afford a place to live.
Financial markets have performed better, with the S&P 500 rising about 25%, largely because of optimism surrounding artificial intelligence investment.
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