Date: August 16, 2025
Source: PulseDaily.com.ng
The United States economy is showing mixed signals, leaving analysts and investors uncertain about its direction. Concerns are rising over the impact of President Donald Trump’s trade policies, immigration restrictions, and tariff measures, which some economists warn could trigger a return to stagflation – a combination of slow growth and rising prices.
Recent government data revealed that the economy grew at an annual rate of 1.2% in the first half of 2025, a decline from the previous year. Job creation has weakened, with hiring slowing sharply in May, June, and July. The trend has raised fears of recession, with some experts warning that discouraged workers are on the rise.
Moody’s Analytics economist Mark Zandi even described the economy as being “on the edge of recession.”
White House Pushback
Despite the gloomy outlook from some analysts, the White House has dismissed concerns, with President Trump maintaining that his policies are strengthening the U.S. economy. However, tensions rose after Trump controversially fired the Bureau of Labor Statistics commissioner, following the release of a disappointing jobs report in early August.
Not all indicators are negative. Consumer spending, a major driver of the U.S. economy, has remained surprisingly resilient. The latest report showed that retail and restaurant sales rose 0.5% from June to July, offering hope that households could keep the economy afloat.
Michael Pearce, deputy chief U.S. economist at Oxford Economics, noted:
“Consumers are down but not out. We expect a modest recovery in spending as tax cuts and stock market gains lift confidence.”
Inflation remains a growing concern. Consumer prices increased 2.7% in July compared to the previous year. Analysts warn that tariffs on imports like coffee and bananas are already pushing prices higher, with more increases expected in the coming months as companies adjust to trade policies.
Wholesale prices, a key measure of future inflation, also climbed at their fastest pace in three years, sparking fears of stagflation returning to the U.S.
The U.S. Federal Reserve remains cautious, holding back from major policy shifts until clearer economic signals emerge. For now, the economy sits at a crossroads – with strong consumer spending on one side, and weak job growth and rising prices on the other.
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