Since taking office in January, U.S. President Donald Trump has been promoting the performance of the U.S. economy.
"Our economy was the largest economy in the history of our country in the first four years," Trump said during a meeting with Italian Prime Minister Giorgia Meloni on April 17. He added: "I think we will do better this time."
At the cabinet meeting on March 24, he said: "We have numbers and we have jobs, I don't think we've seen it before. Look at how it works, but I think the economy will go through the roof."
Trump hasn't been long enough to accumulate a lot of economic data. Data available on work and inflation are beneficial. But other measurable items – consumer confidence, business expectations, inflation forecasts and stock markets – have focused extensively on the direction of the U.S. economy under its policies, especially his much-needed tariff increase. Stocks have performed the worst in April since the Great Depression in 1932.
Since January, the number of workers has increased by 345,000, which is in line with the growth rate of the previous year. The unemployment rate is 4.2%, which is low by historical standards, and initial unemployment claims remain stable. For one of the main Trump campaign themes in 2024 - inflation - the year-on-year rate dropped to almost normal levels, from 3.0% in January to 2.4% in March.
In a series of long-term surveys, consumers and businesses expressed concern that Trump’s tariffs would raise prices, causing a recession or both. Economists believe these indicators are how the economy performs in the near and medium term.
"Even if the 'soft' data has not been disclosed, all 'soft' data is terrible," said Douglas Holtz-Eakin, president of the Center Right American Action Forum.
Business owners said they already felt the pinch.
David Dennison, director of the original pancake restaurant chain in suburban Washington, said the cost of foods like oranges, peppers, avocados and tomatoes increased by more than 20%.
“We also expect equipment failures, parts and new equipment to experience a significant increase,” Denison said. “But the most concerning aspect is the expected difficulty of sourcing parts for our equipment.”
Dean Baker, co-founder of the Liberal Center for Economic and Policy Research, said worrying consumers and clumsy businesses could slow down in spending, investment, sales and employment growth, meaning a bad atmosphere could become a self-fulfilling prophecy.
For decades, two surveys have measured consumer confidence, and for Trump’s first 100 days, neither survey was good.
The University of Michigan Consumer Sentiment Survey measures consumer optimism about the economy, which has declined every month since December 2024. Its April scored 52.2 points accounted for 29% since December 2024. April figures are lower than two months outside of Joe Biden's presidency, a period that includes inflation in the 40-year period in mid-2022.
Another long-term investigation was published by the Business Research Group Conference Committee. The indicator also drops monthly in Trump's observations, with measurements now 15% lower than those measured in December 2024.
This follows along with other polls. For the first time since at least 2001, Gallup, a pollster, has found that more than half of Americans say their financial situation is getting worse. The figure in April was higher than the 49% increase during the Great Recession between 2008 and 2009.
Small businesses (historically, anti-international and anti-association constituencies that have high hopes for the Trump agenda – confidence has also declined under Trump’s leadership.
The National Small Business Optimistic Independent Business Federation has declined monthly since December 2024, and has since fallen by more than 7%.
One of the main factors that reduce consumer confidence is the expectation that Trump’s tariffs will raise consumer prices.
The University of Michigan survey asks consumers every month about inflation expectations for the next 12 months. Consumer expectations for inflation rose sharply in the coming year, from December 2024's forecast of 2.8% to 6.5% in April.
The same goes for businesses every month according to the Atlanta Fed analysis. In December 2024, the study found that 32% of businesses said they expect a "significant" or "very significant" price increase over the next 12 months. By April, that number had risen to 46%.
The Federal Reserve Bank of Philadelphia survey asked if manufacturers had paid more for the recent deal. The survey found that more businesses say they are paying more and the number is falling, saying they are paying less. The gap widened from 26.6% in December to 51% in April.
Each quarter, the Atlanta Fed releases GDPNOW, a forecast for expected growth in the U.S. gross domestic product (GDP), which is the sum of all the economic activity in the country – by looking at the up and down movement of major economic inputs.
GDPNOW turned negative, with the expected annual GDP shrinkage of about 2.5% in the first quarter of 2025, the first projected contraction the model has generated since the second quarter of 2022.
This coincides with independent estimates of the likelihood of a recession. JP Morgan Research said there is a 60% chance of recession next year. Goldman Sachs set it at 45%; the International Monetary Fund sets the probability at 37%.
Stocks have been sliding; the S&P 500 is a broad stock market that fell 18.9% between its February 19 peak and its April 8 low before partially rebounding in the following two weeks. The S&P 500 is now down 4.5% compared to the day after Trump's November 2024 election victory. It has dropped 8.7% since Trump's inauguration in January, down 10.1% from its peak on February 19.
The recession is not certain after the stock market decline, but the correlation is high. The stumble in the stock market can lead to consumers reducing spending and cutting spending. If this happens, companies will see sales drops, causing them to cut their labor and slow down new investments. This makes consumers even more alert to spending, making the cycle lasting.
Since 1950, the National Economic Research Council has declared 10 official recessions. S&P's 500 accompanying declines. During the double-impact recession in 1980 and 1982, the recession did not produce a significant S&P decline last time.
During the seven recessions that accompanied the stock market, the S&P 500 fell 18% to 55%, and during the Great Recession between 2008 and 2009, it fell 55%.
A weekly individual investor survey shows that people are increasingly pessimistic about the ability of stocks to rebound in the short term. In late November, 39% of respondents said they were "bearish" - a "pessimistic" Wall Street term about the stock market. By late April, this share had risen to 56%.
Aside from the numbers, we found several businesses whose leaders say Trump’s tariffs have caused problems.
Dennison of Original Pancake House said that in addition to Trump’s tariffs, he fears that efforts to mass deportation could lead to a shortage of agricultural workers, further raising ingredient prices.
Jax Ward, owner of the Crazy Squirrel Game Store in Fresno, California, said she had to go through not only the effects of the tariffs, but also the “chaotic way of handling it” and “making customers hesitate to spend money.” Ward said she heard similar reports from her peers in the Association of Industry Group Game Manufacturers.
Some of the tabletop game publishers she sells told Ward “they won’t publish this year, or they’re laying off employees and they’ve left behind the manufactured products in China because now it’s too expensive to import them.”
Everything from games to dice is overseas, she said. “It’s hard for me to come up with a few products that are resources and manufactured in the United States.”
Ward said she is currently transferring some of her business to second-hand games, including face-to-face events at the large LEGO section and shops. She also tried to pre-stock items before the tariffs began, but she said not all businesses can do that because it requires strong cash flow and plenty of storage space.
Ward said she knew some store owners were seriously considering closing their business. "Board sales were considered recession-proof in the past," Ward said. "Let's see if they're still."