Economic Growth and Concerns Ahead
In the third quarter of 2025, President Donald Trump managed to steer the U.S. economy toward significant growth, though analysts still express worries as we approach 2026, according to the Daily Caller News Foundation.
Since his return to the White House in January 2025, Trump has initiated several substantial economic policies. These include modifications to customs duties on various trading partners, sweeping tax cuts, and reductions in the federal workforce. Jason Sorens, a senior fellow at the American Institute for Economic Research, noted that while recent growth has been promising, issues like “gradually increasing” unemployment and persistent inflation are hinting at a concerning trend he describes as “moderate stagflation.”
“The narrative for 2025 looks solid,” Sorens said, pointing to real GDP growth supported by domestic consumption. However, he highlighted a rising unemployment rate and inflation that remains significantly above the Federal Reserve’s target, complicating the economic recovery. “If unemployment continues to rise, it suggests that the economy isn’t operating at full capacity,” he cautioned.
According to the U.S. Bureau of Economic Analysis, the GDP grew at an annual rate of 4.3% in the third quarter of 2025, primarily fueled by increasing consumer spending.
White House Press Secretary Khush Desai remarked, “When President Trump took office, we were facing a severe inflation crisis and stagnating growth. In the past year, inflation has eased, growth has surged, and interest rates are down. While challenges remain, there’s hope for continued improvement.”
Interestingly, despite the positive GDP results, critics like Texas Congressman Lance Gooden have commented on what they perceive as discontent regarding Trump’s economic management. He remarked on social media about ongoing “gaslighting” from Democrats, overshadowing what he sees as a booming economy.
In April, Trump proposed tariffs on certain foreign countries, framing it as a measure to “Make America rich again.” However, from what we’ve seen, companies have voiced serious concerns about potential negative impacts from these tariffs—especially regarding consumer pricing in 2026.
“Following the tariff announcements, private investment plummeted by nearly 15% in the subsequent quarter, marking the most significant quarterly decline since 1988, barring recessions,” Sorens observed. While some sectors benefited in the third quarter, the overall investment outlook appears somewhat stable.
On the topic of artificial intelligence, while it has helped lift stock markets, global markets have generally outperformed the U.S. this year, further complicated by a weaker dollar. Sorens added that it’s still unclear if the AI boom and lasting tax cuts will outweigh the downsides of tariffs and federal intervention in private business matters.
Trump’s administration is also looking at significant reductions in the federal workforce in 2025. As reported by the Bureau of Labor Statistics, federal employment fell by 6,000 jobs in November, following a more considerable drop of 162,000 the month prior.
Meanwhile, nonfarm payrolls remained about steady in November, albeit with a modest increase of 64,000 jobs. The Consumer Price Index, indicating general price levels, rose by 0.2% month-over-month during the same period.
Looking ahead, a Goldman Sachs report predicts that U.S. economic growth may accelerate in 2026, driven by diminished “tariff resistance,” lower taxes, and better fiscal management, estimating real GDP growth at 2.6%, surpassing previous forecasts.
Moreover, the Federal Reserve announced it would lower interest rates for a third consecutive meeting. Fed Governor Stephen Milan brought attention to high interest rates, attributing some of the pressure to rising advisory fees.
Interestingly, a late 2025 poll indicated a significant portion of voters hold a negative view of Trump’s economic stewardship. According to an AP-NOPC investigation, approximately 70% of American adults deem the economy as “poor.”
Recent findings also suggest that consumer sentiment is waning, with the Conference Board reporting a decline in their consumer confidence index for December.
House Minority Leader Hakeem Jeffries emphasized that Republicans claimed from the outset to tackle rising living costs, but results have left many feeling dissatisfied.
However, a Harvard CAPS/Harris poll noted that many Americans still favor Republicans and Trump over Democrats when it comes to economic management.
Ultimately, there is a lot of variability in opinions about the economy, which suggests ongoing debates will likely be a hallmark of the upcoming year.
