The US Economy's False Sense of Security
A year into Donald Trump's presidency, the American economy appears to be on a roll, with the unemployment rate at 4.4 percent and gross domestic product growth at 4.3 percent in the third quarter. However, beneath this rosy surface lies a more complex reality.
The US economy has been bolstered by a stock market boom that has lifted Americans' paper wealth, encouraging them to loosen their purse strings and drive consumer spending up nearly 30 percent since the COVID-19 pandemic. This surge in consumer spending has been largely driven by gains in net wealth, with the top 10 percent of earners now accounting for roughly half of all spending – a proportion not seen since officials began compiling data in 1989.
Yet, despite this seemingly healthy growth, experts warn that the economy is hiding deeper problems. The unemployment rate may be low, but the number of workers being added to the workforce has slowed significantly, with hospitality and healthcare adding jobs while retail, manufacturing, and construction – sectors that rely heavily on migrants – all shed positions.
The Trump administration's mass deportation of undocumented immigrants and tightening of legal migration pathways have resulted in negative net migration for the first time in at least half a century. As a result, the US workforce is projected to see a net decline of two million workers this year, according to projections from Oxford Economics.
Furthermore, the "bifurcation" in the US economy has also been felt across the business world, with smaller companies struggling to cope with increased policy uncertainty and tariffs. The surge in tariffs announced by Trump's administration has had an outsize effect on these firms, which are seeing little benefit from the boom in artificial intelligence (AI) industry.
The AI proponents believe that the world is on the cusp of huge gains in productivity that could dramatically raise living standards, but there are concerns about large numbers of people being put out of work. As Bernard Yaros, lead US economist at Oxford Economics, notes, "This could be the new norm – jobless growth. That's one reason people are not feeling so great."
While it is true that Trump's presidency has been marked by a range of policies that have upended businesses and supply chains, the reality is that these disruptions have been largely masked by the stock market boom. The underlying problems in the economy may be more significant than initially meets the eye, and it remains to be seen whether the US economy can sustain this growth in the long term.
For now, Americans are being left with a false sense of security about the state of their economy – one that is built on shallow paper wealth and artificially inflated consumer spending. As Marcus Noland, executive vice president of the Peterson Institute for International Economics, notes, "The gains are going to people in higher income brackets... but these numbers mask the unevenness in the growth in this economy."
A year into Donald Trump's presidency, the American economy appears to be on a roll, with the unemployment rate at 4.4 percent and gross domestic product growth at 4.3 percent in the third quarter. However, beneath this rosy surface lies a more complex reality.
The US economy has been bolstered by a stock market boom that has lifted Americans' paper wealth, encouraging them to loosen their purse strings and drive consumer spending up nearly 30 percent since the COVID-19 pandemic. This surge in consumer spending has been largely driven by gains in net wealth, with the top 10 percent of earners now accounting for roughly half of all spending – a proportion not seen since officials began compiling data in 1989.
Yet, despite this seemingly healthy growth, experts warn that the economy is hiding deeper problems. The unemployment rate may be low, but the number of workers being added to the workforce has slowed significantly, with hospitality and healthcare adding jobs while retail, manufacturing, and construction – sectors that rely heavily on migrants – all shed positions.
The Trump administration's mass deportation of undocumented immigrants and tightening of legal migration pathways have resulted in negative net migration for the first time in at least half a century. As a result, the US workforce is projected to see a net decline of two million workers this year, according to projections from Oxford Economics.
Furthermore, the "bifurcation" in the US economy has also been felt across the business world, with smaller companies struggling to cope with increased policy uncertainty and tariffs. The surge in tariffs announced by Trump's administration has had an outsize effect on these firms, which are seeing little benefit from the boom in artificial intelligence (AI) industry.
The AI proponents believe that the world is on the cusp of huge gains in productivity that could dramatically raise living standards, but there are concerns about large numbers of people being put out of work. As Bernard Yaros, lead US economist at Oxford Economics, notes, "This could be the new norm – jobless growth. That's one reason people are not feeling so great."
While it is true that Trump's presidency has been marked by a range of policies that have upended businesses and supply chains, the reality is that these disruptions have been largely masked by the stock market boom. The underlying problems in the economy may be more significant than initially meets the eye, and it remains to be seen whether the US economy can sustain this growth in the long term.
For now, Americans are being left with a false sense of security about the state of their economy – one that is built on shallow paper wealth and artificially inflated consumer spending. As Marcus Noland, executive vice president of the Peterson Institute for International Economics, notes, "The gains are going to people in higher income brackets... but these numbers mask the unevenness in the growth in this economy."
. Like, the unemployment rate is low, which sounds great on paper, but the number of new workers being added to the workforce has actually slowed down significantly? That's not exactly what I'd call a boom 
. And it's only because folks are spending all their newfound wealth, rather than because actual jobs are being created in a lot of sectors. It's like the economy is just papering over some deep cracks 
. Not to mention the whole deportation thing and net migration stuff... that's not exactly a positive trend 
. I think we need to be looking at this more critically, you know? The stock market boom might be lifting people's spirits, but is it really masking underlying problems or just creating a false sense of security?
. All that money and job growth sounds great on paper, but have you seen the state of the gig economy? People are still struggling to make ends meet, and those who do manage to find work often earn minimum wage or less 
. And don't even get me started on the debt – Americans are drowning in student loans and credit card debt 
. It's not all sunshine and rainbows out there, folks. We need to look beyond the numbers and see what's really going on beneath the surface 
. The US economy is hiding some serious problems, and it's time someone brought them to light 
i also think we need to talk about the impact on smaller businesses. tariffs might be good for some big companies, but what about all the tiny startups that cant compete? and dont get me wrong, ai might bring some gains in productivity, but whats gonna happen to people who lose their jobs? its not just a numbers game, you know?
. i'm all for innovation and progress, but if people are gonna lose their jobs because of it, that's not really progress at all 
. Those 4.3% GDP growth numbers are cool and all, but have you seen how many jobs are being lost in retail? 
That's not exactly a boom. And don't even get me started on the tariffs – I mean, what's up with that? 
It's like Trump is trying to hurt his own businesses. But at the same time... 
I don't know, man. My brain is a mess. Can we have both worlds where everyone gets rich and there aren't any job losses? 
Yeah, didn't think so.
. And then theres the fact that americans r makin most of thier money from the top 10% of earners, not the rest of us 
. Its like the econamy is all about the rich gettin richer 
. Its like, we r all gonna be better off if everyone gets a raise, but instead its just the rich guys getting richer 
.
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. The tariffs and mass deportations are taking a toll, especially for industries that rely on migrant workers. It's like we're seeing two separate economies here – one booming and thriving, while others are struggling to stay afloat 
.
- when ppl start seeing that their retirement funds aren't looking as good as they thought it was...then what? 
. all that money just making it into their pockets, and consumers are buying like crazy because they think it's getting them rich too 
. On one hand, yeah, jobless rates are low and GDP is growing, which sounds awesome! But then you look closer and see that a bunch of jobs got axed from retail, manufacturing, and construction – places where people don't just come to America, they actually live here 
. And it's not like those workers were just sitting around twiddling their thumbs, they needed those jobs to survive.
. Maybe it's time to take a closer look at what's really going on with our economy – and make sure we're not just papering over problems with more money 
. The top 10% of earners are raking in the cash, but what about the rest of us? 
.
#FakeEconomicGrowth #NotAllGoodNews
. and don't even get me started on the small business owners who are struggling to keep up with these new tariffs 
, which isn't exactly ideal. And let's not forget about all these people getting deported or struggling to find jobs in certain sectors 
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, but shouldn't we be worried about people losing their jobs? 
.
. We need to keep an eye on it and make sure it's not just benefiting the top 10% 
. All that paper wealth is just a myth, and when the bubble bursts, who's gonna be left holding the bag? 
But at the same time I think its pretty interesting how our economy has become all about the top 10% 
We need to figure out ways to support those sectors so everyone benefits 
lol saw this article and just had to chime in. i think its interesting that the stock market boom is basically propping up consumer spending, and not actually translating to people's everyday lives. like, how many people can really afford to splurge on gadgets and vacations when they're still struggling to make ends meet?