Rising inflation is one thing. But it is being accompanied by a weakening jobs market as employment growth slows to a trickle and wage rises, especially for the lower paid, have slowed. Unemployment among Hispanic workers — who swung significantly towards Trump last November — rose to a year-high of 5.5 per cent in September, compared with 4.4 per cent overall.
It is true that the big tech companies have mostly financed their AI investments out of free cash flow. But the huge cash reserves of the Magnificent Seven are being drained and AI companies are increasingly turning to equity and debt issuance.
The basic problem is that a lack of demand is not the constraining factor in American manufacturing; it’s the workforce. The number of workers who are able and willing to work on a factory floor is shrinking. Almost 400,000 manufacturing jobs are currently unfilled, according to the Bureau of Labor Statistics.
Trump has been ideologically committed to tariffs and an autarchic or nationalist view of the U.S.’s role in the world economy for decades. In recent decades, economic nationalism has been rising across the entire U.S. ruling class, as administrations of both major capitalist parties seek to compete with China and to prod the European Union to increase its military spending.
Job openings are down, and employment growth is confined to a small number of sectors. The average of about 130,000 jobs added per month in the first half of a year is the weakest since 2010, when the U.S. was beginning its long ascent from the depths of the Great Recession.
Donald Trump ruined everyone’s Fourth of July holiday by signing what he so fatuously called the “One Big Beautiful Bill.” It may be the single most damaging piece of legislation signed into law since… Who knows?
At the end of the day, the bill represents the entirety of the Trump/Republican domestic policy agenda. And even though the senate may tinker around on the edges of it, it will pass the Congress largely intact. In the senate, where the GOP holds a 53-47 majority, three Republicans can vote against it and it will still pass with Vice President JD Vance casting the deciding vote.
The major economies are exhibiting signs of stagflation. That means interest rates could stay high, while economic growth goes missing. That is a recipe for an eventual crash in financial markets.
It’s common for people to think about the price of eggs or gasoline when they think about inflation. But aside from prices for commodities like these, which do fluctuate with “supply and demand,” there are the long-term price increases of commodities and services that are essential to everyday life.
Changes in business investment have always been an indicator of future growth in output and employment – not vice versa, as Keynesians argue. And in Q3, business investment came to a standstill. In previous quarters it was investment in new structures (offices, manufacturing plants etc) that kept business investment contributing about 1% pt to quarterly growth. But in Q3 that has evaporated.
Economic headlines present a confusing jumble of news. Commentators speak of avoiding a recession, while interest rates and food prices remain high. There are plenty of Help Wanted signs yet many people are not feeling particularly flush. What’s really going on? The purpose of this article is to examine the current US economic situation.
First Republic is the third bank to fail after the Silicon Valley Bank (SVB) and Signature. In total, $47bn in bank assets have disappeared into smoke, the losses being taken in part by the shareholders and holders of the bonds in these banks. But there has also been a cost to public funds.
Real GDP contracted in the second quarter of this year by a 0.9% annualised rate (or by 0.2% quarter over quarter). That meant the US economy had contracted for two successive quarters, and so ‘technically’ (by that definition) was in a recession.
“The apparently unquenchable thirst for profits of big pharmaceutical companies, like Pfizer, is fueling an unprecedented human rights crisis.”
The costs and consequences of America’s twenty-first-century wars have by now been well-documented — a staggering $8 trillion in expenditures and more than 380,000 civilian deaths, as calculated by Brown University’s Costs of War project.
