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Trump Economy Hits Rough Start to 2026 03/09 06:25
President Donald Trump promised that 2026 would be a bumper year for
economic growth, but instead it has kicked off with job losses, rising gasoline
prices and more uncertainty about America's future.
WASHINGTON (AP) -- President Donald Trump promised that 2026 would be a
bumper year for economic growth, but instead it has kicked off with job losses,
rising gasoline prices and more uncertainty about America's future.
In his State of the Union address less than two weeks ago, the Republican
president confidently told the country: "The roaring economy is roaring like
never before." The latest batch of data on jobs, pump prices and the stock
market suggests that Trump's roar has started to sound far more like a whimper.
There is a gap between the boom that Trump has predicted and the volatile
results he has produced -- one that could set the tone in this year's midterm
elections as he tries to defend his party's majorities in the House and Senate.
With Trump's tariffs drama ongoing, the war in Iran has suddenly created
inflationary concerns regarding oil and natural gas. To the White House, it is
still early in the year and stronger growth is coming.
No signs of a jobs boom
"WOW! The Golden Age of America is upon us!!!" Trump posted on social media
Feb. 11 after the monthly jobs report showed gains of 130,000 jobs in January.
Since then, the job market has evaporated in worrisome ways.
Friday's employment report showed job losses of 92,000 in February. The
January and December figures were revised downward, with December swinging to a
loss of 17,000 jobs. Monthly data can be rocky, but a trend has emerged that
shows an enduring weakness. Without the health care sector, the economy would
have shed roughly 202,000 jobs since Trump became president in January 2025.
Still, his administration notes that construction job gains outside of the
housing sector point to future hiring growth.
Trump often brags that jobs are going to people born in the United States,
rather than to immigrants. But the latest report punctured some of that
argument.
The unemployment rate for people born in the U.S. has climbed over the past
12 months to 4.7% from 4.4%. This means a greater share of the people who Trump
said would get jobs because of his immigration crackdown are, in fact,
searching for work.
Prices at the pump are going up
"Slashing energy costs is among the most important actions we can take to
bring down prices for American consumers," Trump said in a February speech in
Texas just before the U.S. and Israel attacked Iran. "Because when you cut the
cost of energy, you really cut -- you just cut the cost of everything."
The president has repeatedly told Americans that keeping gas costs low would
be key to defeating inflation. He has talked up the decline, citing figures
that were far below the national average to assure the public that driving was
getting cheaper.
But the strikes against Iran that began Feb. 28 have, for the moment,
crushed that narrative. Prices at the pump have jumped 19% over the past month
to a national average of $3.45, according to AAA. The investment bank Goldman
Sachs warned in an analyst note that, if higher oil prices persist, inflation
could rise from its 2.4% reading in January to 3% by the end of the year.
The administration is banking on plans to contain any energy price
increases, essentially betting that either the conflict will end shortly or the
administration can succeed in getting more tankers through the Strait of Hormuz.
On Sunday as oil prices rose above $100 per barrel for the first time since
2022, Trump sought to assure anxious Americans that it was a temporary problem.
"Short term oil prices, which will drop rapidly when the destruction of the
Iran nuclear threat is over, is a very small price to pay for U.S.A., and
World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!," Trump posted on
social media.
Stocks are off their highs
"You know, we set the all-time record in history with the Dow going to
50,000," Trump said Thursday at the White House.
This frequently repeated talking point has grown stale. The Dow Jones
Industrial Average, one of Trump's preferred measures of success, has dropped
5% over the past month. Stocks are up during his presidency, just as they were
previously when Democrat Joe Biden was president. The recent decline could be
reversed if the war with Iran ends and companies see solid profits over the
next year and beyond. The recent dip, however, should be a warning sign as the
administration has stressed the importance of more people investing in the
stock market through vehicles such as "Trump accounts" for children.
The stock market has become a barometer of how people feel about the
economy, with stock investors tending to have more confidence and those without
money in the markets being more pessimistic.
Joanne Hsu, the director of the University of Michigan's surveys of
consumers, noted that in February a "sizable" increase in sentiment among
people owning stocks "was fully offset by a decline among consumers without
stock holdings."
Productivity is up, but workers aren't benefiting
Trump can point to a win in that the economy has become more productive --
generating more value for each hour of work. That is a positive sign for
long-term growth in the U.S. and a reflection of its strong tech sector.
Business sector labor productivity climbed 2.8% in the fourth quarter of
last year, the Labor Department reported Thursday. But the challenge is that
the gains might not be spread to workers in the form of higher pay as labor's
share of income last year fell to the lowest level on record, noted Mike
Konczal, senior director of policy and research at the Economic Security
Project, a nonprofit aligned with liberal economic issues.
Economy grew at a faster pace under Biden
"Under the Biden administration, America was plagued by the nightmare of
stagflation, meaning low growth and high inflation -- a recipe for misery,
failure and decline," Trump said at the World Economic Forum in Davos,
Switzerland, in January.
The scoreboard tells a far different story, one that makes Biden's track
record in 2024 look better than Trump's performance last year. The U.S. economy
grew at a 2.8% pace during Biden's last year, compared with 2.2% under Trump in
2025.
As for inflation, the primary measure used by the Federal Reserve is the
personal consumption expenditures price index. It was 2.6% in both 2024 and
2025.
Trump has staked his economic argument on doing better than Biden. But while
he has avoided the inflation spikes that haunted Biden's presidency, he has not
delivered stronger growth or more hiring.
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