Economy Slips, Americans Pay: Fallout from Trump’s Tariffs Deepens

Economy Slips, Americans Pay: Fallout from Trump’s Tariffs Deepens

President Trump’s trade war is continuing to wreak havoc across the economy. As May’s jobs report shows a slowing job market, jobless claims are rising and consumers face hiked up prices. One thing is clear: Trump’s chaotic tariffs are leaving working families worse off. Meanwhile, Republicans in Congress are pushing through a bill that will increase prices on health care and groceries to pay for a tax giveaway to the wealthy.

Groundwork’s Chief of Policy & Advocacy Alex Jacquez released the following statement:

“Today’s data is a warning sign that the cracks in the labor market are beginning to widen. American workers, manufacturers, small businesses, and even billionaires with keys to the White House are seeing the signs that the economy is in trouble, and they know where to place the blame: President Trump and his disastrous economic policies.

“The American people have been strapped into the President’s tariff rollercoaster for months. Now, they’re paying the price — literally — and bracing for the worst.”

This week in the Trump Slump, new polling and economic indicators continue to show that President Trump’s actions are deeply unpopular and hurting the economy.

Polling: 

• New research from Navigator shows that a majority (56%) of Americans disapprove of President Trump’s handling of the economy, while nearly half report that they are cutting back on recreational spending and unable to save money. Additionally, 67% think that tariffs are making prices go up.
• Hart Research found that the Republican budget bill is unpopular with 60% of Americans opposing it, and opposition grows significantly as voters learn more about the bill’s impact.
• The American Psychological Association found that job insecurity is having a significant impact on a majority (54%) of U.S. workers’ stress levels.

Economic Indicators: 

• While the May jobs report beat expectations, March and April were revised downward by nearly 100,000, manufacturers shed jobs, and short-term unemployment rose, signaling weakness under the hood.
• The OECD forecasted that U.S. economic growth is likely to “slow markedly” due to tariffs and the Trump administration’s economic policies.
• Private sector employment rose by just 37,000 in May — its lowest level in more than two years — according to data from the ADP.
• Data from the Department of Labor showed that jobless claims rose with 247,000 people newly filed for unemployment benefits.
• U.S.-based employers announced 93,816 job cuts in May — up 47% from the same month last year, according to The Challenger Report.
• New data revealed that economic activity in the manufacturing sector contracted in May for the third straight month.

Expert Commentary: 

• Elon Musk, Former Special Government Employee, tweeted about Trump’s tariffs: “The Trump tariffs will cause a recession in the second half of this year.”
• Redfin Chief Economist Daryl Fairweather spoke on how economic uncertainty is impacting the housing market: “There isn’t any urgency to buying right now — if anything it feels more risky to put a down payment into a home when you might not have a job six months from now.”
• Claudia Sahm, Chief Economist at New Century Advisors, said of the current labor market: “The labor market is good, but it’s not exceptional, and we’re in the process of putting some real strain on the economy.”
• Six Nobel laureate economists authored a letter on behalf of the Economic Policy Institute condemning Trump’s tax bill for increasing inequality and adding to the federal deficit: “Even with the safety net cuts, the House bill leads to public debt rising by over $3 trillion in coming years (and over $5 trillion over the next decade if provisions are made permanent rather than phasing out). The higher debt and deficits will put noticeable upward pressure on both inflation and interest rates in coming years.”
• Ryan Sweet, Chief U.S. Economist for Oxford Economics, said the Bureau of Labor and Statistics’ announcement that it is cutting back its collection of data on consumer prices is “very concerning.”
• Groundwork Collaborative’s Executive Director Lindsay Owens hit back against Treasury Secretary Bessent’s false claim that prices haven’t gone up: “Secretary Bessent can pretend prices aren’t going up, but American consumers literally have the receipts. From big purchases like cars and air conditioners to everyday needs like sneakers, strollers, and summer clothing, prices are climbing and retailers are telling us more hikes are coming. The Trump administration clearly has no plan to bring down costs if they can’t even admit they’re going up. Between chaotic tariffs and their plan to force working families to pay for billionaire tax cuts, consumers should brace for higher prices in the days and weeks to come.”
• Groundwork’s Chief of Policy & Advocacy Alex Jacquez reacted to OMB Director Russell Vought’s appearance before the House Appropriations Committee: “While Elon Musk has left Washington – leaving a trail of destruction in his wake – Russell Vought continues to wreak havoc on essential government programs and the Americans they serve. From unlawfully freezing federal science funding to closing Social Security Administration offices, Vought is moving full steam ahead to codify DOGE’s reckless cuts to basic needs programs to fund billionaire tax giveaways. This is a deeply unpopular agenda that is making life more expensive and difficult for working families.”