In December 2024, the U.S. economy added an unexpected 256,000 jobs. At the time, some economic experts pointed to Donald Trump’s promise of fewer regulations and more favorable trade terms as reasons for private sector optimism.
That optimism melted away quickly after Donald Trump’s inauguration as he paused billions of dollars in job-creating and community-supporting grants, laid off thousands of people in communities across the country, and introduced reckless on-and-off-again tariff policies that cost jobs, drove up prices, and created massive uncertainty for owners of businesses both large and small.
From day one in office, Donald Trump has flooded the zone with distractions, lies, and disinformation to keep everyone’s eyes off the truth: he’s pulling a bait-and-switch on his campaign promises and betraying the very working class people he promised to deliver a robust economy and a promising future.
Trumponomics has already shifted more of the economic burden onto working class families through the Republican spending bill, which cut trillions of dollars from health care and food assistance programs. The non-partisan Congressional Budget Office found that the poorest Americans will lose $1,600 a year due to cuts to Medicaid and food assistance. On the other hand, the ultra-rich get $12,000 richer thanks to tax cuts.
Trumponomics is exacerbating economic instability, reducing investment, slowing job creation, and encouraging riskier behavior from wealthy investors at the expense of working class people.
The Trump administration isn’t making it easy to connect the dots. Since his inauguration, the share of CPI prices calculated through imputation rather than direct observation has jumped from 10% to 30%. Not only has the quality of data and information eroded since Donald Trump took office, his administration has actively tried to hide economic data it found unfavorable. Officials in the Trump administration held back and censored parts of a government report because it projected a rise in the U.S. farm trade deficit later this year.
Waiting for a single, catastrophic economic event to occur means you’re missing the story right under your nose. Americans are already being hurt by the slow-speed trainwreck that is Trumponomics, and the American economy is enduring damage that could take decades to repair.
Trumponomics Impact: Increased Economic Instability
- The Leading Economic Indicator decreased .3% in June, falling by a total of 2.8% over the first half of 2025.
- According to The Conference Board, not even record stock price rallies could offset very low consumer sentiment, three months in a row of rising initial unemployment insurance claims, and a weakened manufacturing industry.
- The latest jobs report showed payrolls increased by the smallest number since October 2024. The manufacturing industry lost 7,000 jobs, wholesale trade lost 6,600 positions, while professional and business services payrolls decreased by 7,000 jobs.
- Inflation rose to 2.7% in June, above the Federal Reserve’s target of 2%.
- The International Energy Agency said it expects global oil demand to grow at the slowest pace since 2009 and cited the impact of the economic uncertainty created by Trump’s tariffs as the cause.
- On a year-over-year basis, discretionary spending on services is down .3% through May, and transportation spending was down 1.1%, spurred by declines in auto maintenance, ride-sharing, and air travel, which had the steepest drop at nearly 5%.
- The drawback in discretionary service spending signals that households are tightening their budgets.
- Economists at Wells Fargo warned that in more than 60 years, there has never been a recession without discretionary spending falling on a year-over-year basis.
- The U.S. economy is expected to grow by only 1.6% this year. Coupled with elevated inflation levels, conditions are ripe for stagflation.
- The increased economic instability is giving corporations an excuse to raise prices.
- Helen of Troy’s CFO said the company is deploying “strategic price increases” to raise prices by as much as 10%.
- Steel production firm Nucor Corporation increased the price of hot-rolled coil by $20 a ton to capitalize on favorable market conditions while navigating the complex landscape of tariff uncertainty.
- Copper industry veterans have warned they will have to pass their price increases on to customers thanks to Trump’s tariff on the metal, for which Americans were already paying 25% more than the rest of the world.
- Athletic apparel giant Nike also announced it would raise prices.
- Mattel confirmed that the company would raise prices as tariffs increased the cost of production.
- Beef prices are already at an all-time high, with experts warning they will climb higher when Trump’s 50% tariff on Brazil takes effect in August.
Trumponomics Impact: Slowing Job Creation
- The conservative think-tank American Enterprise Institute finds Trump’s aggressive immigration policies, aimed at emphasizing deportations and disincentivizing immigration, will result in negative net migration in 2025.
- Trump’s policies will reduce GDP growth by as much as .4% – putting downward pressure on growth in the labor force.
- A reduction in the labor supply by deporting millions of workers would raise inflation 1.5% over three years, including a .5% increase this year.
- Employment growth when the labor market is operating sustainably at “full employment” could be between 10,000 and 40,000 jobs a month in the second half of 2025 (down from 140,000 to 180,000 in 2024).
Trumponomics Impact: Reduced Investment
- According to the Penn Wharton Budget Model, instead of building factories and creating new jobs in the United States as promised by Trump, importers have avoided $6.5 billion in tariffs, equivalent to 13.1 percent of new revenue, by rushing to buy and shifting how they shop to avoid getting slammed by the new tariffs.
- Conservative and chief economist at American Compass, Oren Cass, said, “If a tariff starts at zero but companies believe it will reach 50 per cent in a few years, they will invest as quickly as if the rate starts at 50 per cent. But starting the rate at 50 per cent, and leaving companies to guess what it will be in the future, maximises the disruption and creates the weakest incentive.”
- Roughly a third of the investments touted by the Trump White House include plans that were at least partially in production before Trump took office and implemented Trumponomics.
- The second quarter of 2025 was the first time since 2021 that high-grade U.S. debt downgrades outpaced upgrades in dollar terms, and there were more than 11 times more bonds falling to junk than were upgraded to investment grade status.
- Real-world investment projects are already crumbling under Trumponomics. Brightline Trains Florida, the private passenger railroad between Miami and Orlando, is deferring interest payments on its debt. The company deferred a July 15 interest payment on about $1.2 billion of 10% and 12% coupon tax-exempt bonds.
Trumponomics Impact: Encouraging Risky Behavior on Wall Street
- Reckoner Capital Management announced an exchange-traded fund that allows investments in collateralized loan obligations (CLOs), while leveraging 50% of its exposure to buy more CLOs.
- In a market downturn, leveraged positions are forced to sell assets to meet margin calls. This can create a vicious cycle of falling prices, forced selling, and further extreme price drops – often more than investors anticipate.
- Trumponomics ushered in the return of Ponzi dynamics on Wall Street. Strategy is issuing new stock just to pay dividends on earlier bitcoin‑funded securities.
- Private credit firms are encouraging borrowers to embrace higher leverage ratios for better lending terms, up to six times their earnings, particularly for companies owned by private equity firms. Trumponomics is creating more risk, more debt, and potentially more devastation for American companies and their workers.
CONCLUSION
The warning signs are everywhere: slowing job growth, higher prices, shrinking investment, and a Wall Street once again high on risky bets.
Trumponomics is a slow-motion disaster that’s already making life harder for working Americans.
Behind the noise, the gimmicks, and the blame-shifting, Trump is selling out the very people he promised to lift up. Families are paying more, job creation is stalling, businesses are freezing investments, and the financial sector is inching back toward dangerous, pre-2008 behavior.
This isn’t the strong economy Trump promised. It’s an economy weighed down by chaos, grift, and broken promises, and the longer Trumponomics goes unchecked, the more damage it will do.
American Bridge 21st Century is tracking the impacts of Trumponomics at the local level through its open-source database, the Republican Impact Project. For even more research and data on the effects of Trumponomics, please email [email protected].
Published: Jul 23, 2025