Prices put pressure on businesses and consumers while bringing billions of dollars closer to the US government. A labor market that shows major signs of cracking even if the unemployment rate remains moderate. Technological stocks increasing to Wall Street, supplied by the boom of artificial intelligence – like many other sectors are in difficulty.
As the Secretary of Commerce said, Howard Lutnick, on social networks earlier this week: “The Trump economy has officially arrived.”
Last week was already ready to be a DOOzy for data, investors and analysts impatiently anticipating updates on economic growth, jobs and the latest Fed interest rate decision. Large companies like Apple, Amazon, Meta and Microsoft have announced their latest financial results. Trump’s deadline for commercial transactions has been set for Friday.
But what happened this week proved to be more extraordinary than anyone who did not expect.
“I send red rockets: we are on the precipice of a recession,” said Mark Zandi, chief economist at Moody’s Analytics, a financial research company. “If the prices continue to increase, I don’t know how we avoid a recession.”
By entering this week, the US economy had generally been considered in good shape despite the uncertainty and concerns about the slowdown in growth.
The week started in Scotland with the announcement of an agreement with the European Union which would fix rates at 15%, ending months of uncertainty surrounding the largest trading partner in the United States.
Commercial negotiations then moved to Sweden, where the main officials of the United States and China held two days of negotiations. The talks have produced neither an agreement nor an official extension of the commercial truce of the two countries, which will expire on August 12.
“The meetings were very constructive,” said Treasury Secretary, Scott Bessent, to journalists after discussions ended. “It’s just that we did not give the signature.”
Given the importance of trade relations between the two largest economies in the world, the cliffhanger meant that the cloud of uncertainty created by Trump’s prices persisted, although certain transactions have been concluded with other major business partners, including the European Union and Japan.
On Tuesday offered few reasons for a renewal of optimism, the international navigation giant UPS again refusing to issue financial forecasts for the rest of the year, which aroused investor concerns about the impact of the changing trade war of Trump and provoking the actions of the company.
On Wednesday started with the figures of the trade department for gross domestic product in the second quarter, or GDP, which measures economic growth in the United States. Data has shown an annual gain of 3%, beating expectations. But the same report also contained disturbing signs of business investment, even if price growth is accelerating.
Later in the day, the federal reserve announced that it maintained its unchanged reference interest rate, partly because of these inflation problems. It attracted Trump’s anger, who spent weeks hunting the president of the Fed, Jerome Powell, to reduce the key loan rate. In the remarks following the announcement of the Central Bank, Powell underlined the continuous concerns about the potential of Trump’s prices to increase prices for American consumers – but critically, described the “solid” job market. In particular, two members of the rate board of directors – both appointed by Trump – were dissident, the first time that occurred in more than three decades.
The profits from the Microsoft and Facebook Parent Meta eruption – two companies at the Center of the AI Investment Boom, which is a key element in the interior agenda of Trump – helped the stock market to reach fresh heights early Thursday. Microsoft is briefly brief the second company to be worth more than 4 billions of dollars on the stock market.
However, when the markets closed that day, the actions had erased their earnings after Trump sent letters to more than a dozen pharmaceutical companies by asking more competitive American customers for new drugs and giving them 60 days to comply.
Late Thursday evening, Trump unveiled a new set of radical rates that unilaterally imposed higher import taxes on a multitude of business partners, including allies like Canada and Taiwan. The new effective rate of more than 15% has shocked the world markets. The month closed with the Treasury Department noting that the collections of monthly prices had reached another new record of more than $ 29 billion.
In an interview with NBC News that evening, Trump praised the new extensive prices, saying that he thought that everything was going “very well, very fluid”, when he remained open to new offers.
Then the report of Friday jobs arrived.
At 8:30 am, the Bureau of Labor Statistics published revisions showing highly lower job totals in May and June initially, while noting that the economy had added only 73,000 jobs in July, well below expectations. All in all, this suggested that the United States had won an average of 35,000 jobs per month in the last three months-and to the exclusion of the increases observed in the health care industry, the United States had lost more jobs it had created.
However, the unemployment rate remained at 4.2%, a sign that overall unemployment remains moderate. However, many economists have noted that the data point is largely attributable to the repression of the president’s immigration, which reduces the global workforce.
The White House praised the loss of workers born abroad, as it also noted a more sustained increase in labor among workers born in the country.
“If we exchange job holders born abroad for job holders of American origin, I think it is a victory,” said Stephen Miran.
He added that there was a “very good reason” to believe that the economy would improve, citing trade agreements and Trump tax reductions.
But for Trump, the widest public view of the public market of a weakened labor market aroused an unprecedented response: shortly after 2 p.m. on Friday, the president announced his intention to dismiss the head of the office of Labor Statistics on what he said to be errors in employment data, as well as accusations that the agency had “manipulated” the figures before the 2024 data. None of the allegations was corroborated.
This decision sent shock waves via Washington, some experts warning that he has risked reducing the United States to the level of authoritarian regimes.
“President Trump is once again destroying the credibility of our government in dismissing non -partisan experts and civil servants because he does not like the facts they present,” said Max Stier, CEO of the non -partisan partnership for the public service. “The governments that take this path are very quickly found in the ugly territory.”
It was not clear if the outgoing commissioner of the BLS, Erika Mcentarfer, appointed by the Biden administration, would seek to contest his dismissal to the court. It turns out that, in addition to appointing a new chief of the critical data agency, Trump will also be able to appoint a new member to the Fed board of directors after Adriana Kugler, another named by Joe Biden, announced his resignation unexpectedly. The two candidates must still be confirmed by the Senate, who remains closely controlled by the GOP.
When asked if the White House continued to house concerns about the direction of the economy, Kush Desai, spokesperson for the White House, published the following declaration:
“During his first mandate, President Trump used a first economic program in America to offer historical prosperity of the working class and the first reduction in inequalities in wealth and income during the decades. [second] Term, the President Trump implements the same political combination of deregulation, more equitable trade and pro -growth tax reductions on an even greater scale – as these policies take effect, the best remains to come. »»
This point of view is not shared among other economists.
“All of this is disturbing: a weakening of the economy, a slowdown in the labor market, an increase in inflation, an increase in prices, a political influence on a statistical agency, a more political influence on the Fed, tensions with Russia and the start of a market correction,” wrote the chief economist Ey Parthenon, Greg Daco,