Trump Economy at 18 Months: Resilience Mixed with Stalled Progress

Eighteen months into President Donald Trump’s second term, the U.S. economy has weathered major policy shocks, including immigration restrictions, higher tariffs, and an unexpected war with Iran, but key promises on prices and manufacturing jobs remain unfulfilled ahead of the midterm elections.

Jobs and Labor Force Decline

Government data shows both the labor force and overall employment have declined since Trump returned to office, driven largely by immigration enforcement and an aging population. While an AI-driven investment boom has boosted construction jobs, manufacturing employment remains lower than when the previous administration left office.

Inflation Remains Above Target

Despite campaign promises to lower prices, inflation has only modestly eased and remains above the Federal Reserve’s 2% target. Tariffs, rising oil prices tied to Middle East tensions, and AI-related demand have all added pressure, with some Fed officials warning of renewed inflation risk.

Consumer spending has held up, but inflation-adjusted disposable income has stalled. Housing affordability remains strained by elevated mortgage rates and insurance costs.

Stock Market and AI Investment Boom

The S&P 500 has gained about 25% during Trump’s term, in line with historical presidential averages, while AI-related corporate bond issuance has reached record levels, supporting broader economic growth.