As we approach the end of 2025, it’s a good time to take stock of the US economy. Depending on where you stand, you’re hearing very different things about the economy, but a pretty consistent theme is an administration that has not delivered on promises made to voters.
The standard metrics can’t tell the whole story right now. The immigrant purge is going to disproportionately affect housing construction and the higher value ag segments, for example. You mentioned the drop in manufacturing employment, which is probably mostly tariff and uncertainty driven. There are so many moving parts of Trump’s chaos AND he’s trying to blow up the tools we use to monitor everything. I understand your point about the current situation not being so grim, but there’s a bunch of junk in the log flume that is headed straight for us. I’m personally more concerned about the labor market risk, but who really knows.
This does indeed seem about right! But also we haven't seen catastrophic inflation yet or the huge decline in consumer spending some folks were predicting from tariffs, so the vibes are probably right to be worse than the data--they reflect that there's nothing fun about an economic slowdown, even if it falls short of a recession. But it's also true that the data is both hard to interpret--GDP stats are very hard to parse with the export/import shocks--and really could be a whole lot worse! We've basically flatlined job growth across all of the economy that can flatline, and yet household incomes and employment rates are barely wavering. If you told me we'd be on track for a rebound in inflaiton and more than a million fewer jobs created this year than last, I would have predicted something much close to the vibes than the data
The standard metrics can’t tell the whole story right now. The immigrant purge is going to disproportionately affect housing construction and the higher value ag segments, for example. You mentioned the drop in manufacturing employment, which is probably mostly tariff and uncertainty driven. There are so many moving parts of Trump’s chaos AND he’s trying to blow up the tools we use to monitor everything. I understand your point about the current situation not being so grim, but there’s a bunch of junk in the log flume that is headed straight for us. I’m personally more concerned about the labor market risk, but who really knows.
This does indeed seem about right! But also we haven't seen catastrophic inflation yet or the huge decline in consumer spending some folks were predicting from tariffs, so the vibes are probably right to be worse than the data--they reflect that there's nothing fun about an economic slowdown, even if it falls short of a recession. But it's also true that the data is both hard to interpret--GDP stats are very hard to parse with the export/import shocks--and really could be a whole lot worse! We've basically flatlined job growth across all of the economy that can flatline, and yet household incomes and employment rates are barely wavering. If you told me we'd be on track for a rebound in inflaiton and more than a million fewer jobs created this year than last, I would have predicted something much close to the vibes than the data