Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
President Trump is facing increasing scrutiny over his economic policies as the nation grapples with rising inflation, a weakening job market, and the repercussions of his trade agenda. Federal data anticipated for release this Friday is expected to indicate that annual inflation has reached 3 percent, marking the first time it has hit this level since the Biden administration and exceeding the Federal Reserve’s target by a full percentage point.
Inflation and Economic Outlook
Economists project that the Consumer Price Index (CPI) report for September will show elevated inflation, primarily driven by increases in energy and food prices, which are significant expenditures for American households. Despite claims to the contrary by President Trump, prices have seen a steady ascent since the latter half of the year, a period that largely coincides with the solidification of his tariff agenda. Annual inflation, as measured by the CPI, initially dropped from 3 percent in January to 2.4 percent in March but subsequently rose to 2.9 percent by August.
The job market has also shown signs of weakening, with businesses hiring fewer workers compared to recent years. This trend has contributed to a higher unemployment rate, impacting millions of Americans financially. A Quinnipiac University survey released Wednesday indicated that only 38 percent of voters approve of Trump’s handling of the economy, representing his lowest approval rating on this issue since February 2017, with 57 percent expressing disapproval.
Tim Malloy, a polling analyst at Quinnipiac University, commented on the findings, stating, “With a nearly 20-point gap between approval and disapproval on President Trump’s handling of the economy, it’s a low watermark for a president who promised a vibrant and muscular economy.”
In response, White House spokesperson Kush Desai issued a statement to The Hill, asserting that “President Trump’s economic agenda has tamed Joe Biden’s inflation crisis, delivered real wage growth, and secured trillions in investments to make and hire in America.” Desai added that this agenda “unleashed historic job, wage, and economic growth in President Trump’s first term, and Americans can rest assured that as this agenda continues to take effect in President Trump’s second term, the best is yet to come.”
Impact of Government Shutdown
The ongoing government shutdown, now in its third week, has complicated efforts to paint a clear picture of the U.S. economy by halting most federal data collection. The September CPI report is one of the few federal economic datasets scheduled for release, deemed essential by the White House for calculating the cost-of-living adjustment for federal benefits.
With limited federal data, economists and policymakers are increasingly relying on private-sector data and anecdotal evidence to assess the economy. Stephen Kates, a financial analyst at Bankrate, highlighted this challenge in a Tuesday analysis, noting, “The economic impact of the government shutdown and its disruption to data collection has not yet been fully felt.” He warned that “the longer the shutdown continues, the larger our blind spot will be.”
Available private-sector data suggests that high-earning U.S. households are currently sustaining the economy through consistent consumer spending, largely supported by a strong performance in the stock market.
Trade Battles and Global Policy
The costs associated with Trump’s trade battles are accumulating for businesses, which have reduced hiring amid the uncertainty generated by fluctuating tariff rates and trade conditions. Analysis from Elsie Peng, a research economist at Goldman Sachs, indicates that U.S. job growth has slowed significantly, from an average of 150,000 per month at the start of 2025 to just 25,000 by August.
Peng attributes a monthly loss of 100,000 jobs to a combination of “slower immigration, reduced government hiring and federal contract funding, and elevated uncertainty.” While the direct costs of tariffs may play a limited role, the unpredictability of trade policy appears to be a primary deterrent for companies considering new hires. Even some architects of Trump’s economic agenda have acknowledged the detrimental effect of this uncertainty on businesses.
Further complicating the economic landscape, President Trump’s decision to provide financial support to the Argentinian government has drawn bipartisan criticism. The administration finalized a $20 billion plan to bolster Argentina’s economy through currency markets, with President Trump indicating potential for additional financial assistance if President Javier Milei’s party performs well in upcoming elections.
Treasury Secretary Scott Bessent stated that the administration’s “America First economic agenda has already provided over $2 trillion in tax cuts for middle class Americans, lower taxes and less red tape for small businesses, and the strength on the world stage to both counter our adversaries and support our allies.”
However, the bailout has sparked outrage from Democratic lawmakers, who accuse President Trump of prioritizing foreign allies over American citizens. Republican senators have also voiced concerns, particularly regarding President Trump’s proposal to import beef from Argentina to lower domestic prices, a move that could negatively impact American ranchers.
Beef prices have increased by 16 percent this year, as U.S. producers contend with reduced herd sizes. Senator Deb Fischer (R-Neb.) expressed “deep concerns” to the White House, arguing that the plan would not benefit consumers and would harm ranchers in her state. She emphasized that “Nebraska’s ranchers cannot afford to have the rug pulled out from under them when they’re just getting ahead or simply breaking even.”
Senator Mike Rounds (R-S.D.) echoed these sentiments, sharing concerns from “hundreds” of ranchers with President Trump and Agriculture Secretary Brooke Rollins. He stated that “opening the market to even more foreign beef, which American consumers cannot differentiate because of current labeling rules, would only exacerbate the problem and hurt domestic producers.”
President Trump, however, defended his stance on Truth Social, asserting that “The Cattle Ranchers, who I love, don’t understand that the only reason they are doing so well, for the first time in decades, is because I put Tariffs on cattle coming into the United States.” He added, “If it weren’t for me, they would be doing just as they’ve done for the past 20 years — Terrible! It would be nice if they would understand that, but they also have to get their prices down, because the consumer is a very big factor in my thinking, also!”
Previously, White House spokesperson Kush Desai had indicated the administration’s focus on “reversing a prolonged decrease in the supply of live cattle by growing American cattle herds with robust action to deliver disaster relief to cattle country, support new ranchers, and reduce risk for cattle producers.”
Key Takeaways
President Trump’s administration is navigating a complex economic environment characterized by rising inflation and a challenging job market, compounded by the impacts of his trade policies and a government shutdown that obscures vital economic data. These domestic pressures are further complicated by international policy decisions, such as the Argentina bailout, which has drawn bipartisan criticism and heightened concerns among key agricultural sectors.
