Even as US slashes jobs, ‘it is the calm before the storm’, economists warn
The first major set of economic reports last week reflect the state of the United States economy during President Donald Trump’s first full month in office. The data reveal a spike in layoffs and slower hiring growth across both the public and private sectors, with looming cuts suggesting larger economic woes in the months ahead.
The US economy added 151,000 jobs, according to the Labor Department report, which came out on Friday – well short of economist expectations showing a stall in economic growth. Approximately 7.1 million Americans are currently receiving unemployment benefits compared with 6.5 million this time last year.
“I think the real risk here is that if Trump doesn’t reverse course on what he’s doing, it could be his last boring report, which I think would be really damaging to the economy. If you look under the hood, I think we are starting to see pretty foreboding cracks,” Elizabeth Pancotti, the managing director of policy and advocacy at the economic think tank Groundwork Collective, told Al Jazeera.
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The White House painted an alternative picture. “In one month under President Trump, the American economy is soaring back to greatness after the economic calamity left by Joe Biden,” White House Press Secretary Karoline Leavitt said in a statement.
Former President Biden, however, was lauded as leading the best economic recovery in the world following the global economic downturn amid the COVID-19 pandemic.
Mark Zandi, the chief economist at Moody’s Analytics, said that last week’s numbers are probably the best we will get in a while amid looming layoffs and tariff fears.
“This is the calm before the storm, before we start to see the fallout in the job market from the trade war and the DOGE cuts, and other economic policies from Trump,” Zandi told Al Jazeera. DOGE is the newly created Department of Government Efficiency, which is led by ardent Trump supporter, billionaire Elon Musk.