For all the chaos along the way, President Trump’s first year back in the White House is ending with an economy that looks, by most conventional measures, much like the one he inherited. Unemployment is low, consumer spending is strong and inflation is stubbornly high but gradually improving.
Tariffs, Mr. Trump’s signature economic policy, haven’t set off the manufacturing renaissance he promised, but nor have they caused the surge in inflation that many forecasters feared. The stock market bobbed and weaved its way to a solid if not spectacular 16 percent gain. Analysts who began 2025 warning of the perils of uncertainty ended it by remarking on the U.S. economy’s surprising resilience.
Yet it would be a mistake to think that Mr. Trump’s actions left the economy unscathed.
Much more so than in his first four years in office, Mr. Trump has begun his second term with what amounts to an all-out assault on many of the institutions and policy paradigms that have long been seen by leaders of both major political parties as the foundations of American economic strength.
He has sought to undermine the independence of the Federal Reserve, fired the head of the Bureau of Labor Statistics, an agency that collects key economic data, and cut funding to the universities that conduct much of the country’s cutting-edge scientific research. He has intervened in private business deals, taken stakes in private companies and threatened corporate executives who do not adequately embrace his policy priorities. He has sharply restricted immigration, questioned the value of America’s alliances and imposed punishing tariffs on friends as well as adversaries.
Many of those actions are being challenged in the courts, and future presidents could reverse course on at least some of the current administration’s policies. But economists from across the ideological spectrum warn that Mr. Trump is setting the country on a path that will, in the long run, leave the economy less dynamic, the financial system less stable and Americans less prosperous in the decades ahead.
“We’re weakening the special sauce that made America so great,” said Kimberly A. Clausing, an economist at the University of California, Los Angeles, School of Law.
Ms. Clausing worked in the Treasury Department in the Biden administration. But her concerns are shared by many economists on the right, including some who have worked for Mr. Trump.
