Economists raise red flags about the US economy as it faces potential turbulence amidst job cuts and impending trade wars. Recent reports indicate a slowdown in hiring and an uptick in layoffs during President Trump’s administration, raising concerns about future economic stability. In January alone, the US economy added a mere 151,000 jobs, falling short of expectations, as around 7.1 million Americans now rely on unemployment benefits, marking a stark contrast to last year’s figures.
The White House paints a rosy picture of recovery under Trump, with Press Secretary Karoline Leavitt asserting the economy is bouncing back after what she claims was previous mismanagement. Conversely, former President Biden is celebrated for steering the country through an unprecedented recovery following the pandemic. Market voices, including Mark Zandi from Moody’s Analytics, caution that recent job numbers might represent a fleeting peak, predicting deeper struggles ahead due to job cuts and looming tariff implications.
Recent declines in the stock market reflect this anxious sentiment, with the S&P 500 and Nasdaq experiencing significant drops. Economic indicators signal potential worsening conditions, like the rise in part-time work figures, suggesting many are unable to find full-time employment. Elizabeth Pancotti from Groundwork Collective underscores the perilous trajectory, highlighting that cracks are beginning to show in the economy just weeks into Trump’s tenure.
Job cuts are not limited to the federal workforce, as private sector layoffs rise sharply, particularly in the retail and tech industries. Reports indicate February alone saw over 172,000 job cuts, with retail cuts surging by 572 percent compared to last year. Amidst the uncertainty, many workers grapple with financial difficulty, leading to reduced consumer spending, a vital engine for the economy, and creating a feedback loop that threatens further job losses.
Looking ahead, tariffs on trade with Canada and Mexico are poised to further strain the economy, especially in industries like automotive manufacturing. As major companies voice concerns, including Ford’s CEO warning about potential damage to the sector, economists predict that continued trade tensions could drive the nation into recession.
While Trump asserts success stories in new investments, critics maintain these are speculative and long-term benefits that won’t be felt immediately. With new plants projected to open years down the line and previous commitments linked to the prior administration, scepticism around Trump’s assurances remains high as the nation navigates turbulent economic waters, setting the stage for potential stormy times ahead.
Economists warn of a turbulent US economy amid rising job cuts and potential trade wars. Recent data show a decline in job growth, with 151,000 jobs added in January—well below expectations. As layoffs surge, particularly in the retail and tech sectors, market indicators suggests a recession may be nearing. While the administration touts new investments, scepticism remains regarding immediate impact, casting doubt on future economic stability.
In summary, the US economy is at a critical juncture with rising job cuts and trade uncertainties. Economists warn of a looming storm as the impacts of these changes begin to materialise. The juxtaposition between the White House’s optimistic portrayal and the stark realities of layoffs and consumer behaviour illustrates the fragile state of economic recovery, as fears of recession loom ever larger over the horizon.
Original Source: www.aljazeera.com
