Rising Core Inflation, Plummeting Consumer Confidence Suggest Worsening Economic Instability Under Trump

Sweeping tariffs and chaotic policymaking are eroding working families’ pocketbooks and failing to bring costs down

As consumer confidence falls for the second month in a row, reaching its lowest level since early 2021, February’s Personal Consumption Expenditures Price (PCE) Index showed that President Trump has failed to lower the cost-of-living for working families.

Core PCE, the Federal Reserve’s preferred measure of inflation, came in higher than expected, rising 0.38% in February and lifting the year-over-year figure to 2.8% from 2.6% in January. Additionally, real personal spending barely rebounded from a pullback in February, indicating that consumers are wary of spending in Trump’s chaotic economy.

Groundwork Collaborative’s Chief of Policy and Advocacy Alex Jacquez reacted with the following statement:

“Once again, this week’s economic data show that Trump is steering the country toward a recession. Americans have already lost faith in the Trump Administration’s lack of focus on lowering prices as inflation on everyday goods continues to climb.

“Starting erratic trade wars with allies and cutting Social Security and other vital safety net programs doesn’t make rent or groceries more affordable.”

Instead of lowering costs, President Trump is more interested in greasing the skids for his billionaire donors and advisors. The Washington Post reported this week that the Trump Administration’s “demolition” of the IRS would put billions back into the pockets of ultra-wealthy tax cheats this year and defund taxpayer services, as Republicans in the Senate prepare to pass a budget resolution that would give the wealthiest Americans a massive tax giveaway while gutting vital programs like Medicaid and food assistance.

THIS WEEK IN THE TRUMP SLUMP: New polling and economic indicators continue to show that the Trump economy is heading for disaster.

Economic Indicators:

• Consumer confidence, as measured by the Conference Board, is at its lowest level since early 2021 – falling more than expected in March. This follows February’s drop, which was the largest since August 2021. The Expectations Index for the future is at its lowest level in 12 years and meets the threshold that typically signals an upcoming recession.
• Real estate company Redfin’s tracking of monthly housing payment found that homebuyers now have the highest payments on record – up 5.3% from a year ago to an all-time high.
• The manufacturing boom is looking more like the opposite. The S&P Global flash March factory index entered contraction territory. Sentiment about prospects over the coming year fell to the second-lowest level since 2022.
• U.S. businesses are pulling back on hiring, according to an analysis of the U.S. Census Bureau’s Business Trends and Outlook Survey. Contrary to the Trump Administration’s claims that their policies will benefit U.S. manufacturers, the change in employment plans for manufacturers has been particularly severe.
• Year–over-year and month-over-month core PCE, the Federal Reserve’s preferred measure of inflation, came in higher than expected. Core PCE prices rose 0.38% in February, lifting the year-over-year figure to 2.8% from 2.6% in January. Additionally, real personal spending barely rebounded from a pullback in February, indicating that consumers are wary of spending in Trump’s chaotic economy.

Polling

• Polling from Gallup shows that 59% of Americans disapprove of the president’s handling of the economy – the highest disapproval rating of the issues polled by Gallup.
• Navigator Research found that a plurality of Americans believe the economy will be worse off a year from now.
  • Navigator also found that the majority of battleground residents negatively rate Trump’s economy.

Expert Commentary

• Mark Zandi, Chief Economist for Moody’s Analytics, said this week that the chances for a recession are 35% and rising. He wrote in the Philadelphia Inquirer,  “The odds of the economy suffering a recession in the coming year are uncomfortably high. I would put them at over one-third and rising. At the start of the year, there was little chance the economy would falter.”
• Alan Blinder, former vice chairman of the Federal Reserve, authored a piece for the Wall Street Journal on Trump’s “Russian Roulette” handling of the economy. “Mr. Trump’s actions seem designed to drive the U.S. economy into the ground. This would truly be a Trumpcession,” wrote Blinder.
• A former International Monetary Fund official warned that under Trump, the U.S. is looking more and more like “an emerging-market economy in trouble” due to Trump’s erratic policymaking, the increasing power of oligarchs, and waning confidence in the rule of law.
• A new Deutsche Bank survey of 400 financial professionals put the odds of a recession next year above 40 percent.

Email press@groundworkcollaborative.org to speak with a Groundwork expert about President Trump’s handling of the economy.