Trump’s First-Year Economy: Growth, Tariffs, and Rising Public Anxiety

As we kick off a new year, it’s a good time to assess President Donald Trump’s performance on the economy. He came into office a year ago with his “America First” philosophy. He promised to bring down the cost of living, create jobs, reduce illegal immigration at the border, enact big corporate and income tax cuts, and more. So, how is he doing on his campaign promises?

Below are ten specific economic indicators, which reveal a split-screen reality of positives and negatives. Most ominously, Americans are turning increasingly gloomy over their own economic futures.

1. Robust economic growth -- the White House can brag about the US economy expanding in the third quarter of 2025 at a robust annual clip of 4.3%, the fastest pacein two years, driven primarily by strong consumer and government spending.

2. Global tariffs – pre-Trump tariff rates were on average a mere 2.4%, but now ring the bell at an average 16.8%, the highest since 1935. While destabilizing trade relationships with allies and competitors worldwide, the tariffs have also increased federal revenue by around $200 billion in 2025. That is providing a significant new source of government income, which the US will need to offset large increases in the federal debt arising from huge tax cuts for wealthy Americans in Trump’s One Big Beautiful Bill, which was passed last July. However, this fiscal windfall comes at a cost to consumers. If we break it down, the additional revenue amounts to approximately $1,600 per household annually that consumers had to pay in tariff-induced higher prices, illustrating the tension between government gains and household costs.

3. Inflation from the tariffs has not increased as much as experts warned. But the inflation numbers may be unreliable because the 43-day government shutdown—the longest in US history—disrupted data collection, muddying the picture. It’s possible that we have not yet seen the full impact of the tariffs on the cost of living.

4. Stock market gyrations – After a roller coaster in the Spring, the stock market has reached new record highs in late 2025, with the S&P 500 up over 17% for the year. But unfortunately, that does not actually benefit many Americans, since the top 10% of affluent Americans own 93% of all stocks. And by other measures, the stock market roller coaster is turning into a bubble that portends future trouble. Signs include: the S&P 500 price-to-earnings ratio (P/E ratio) is sky-high, even higher than before the dot-com bubble crash in 2001. Also, just like an investment casino, a vast amount of money has poured into the AI sector in a very short period.

Spending on AI development, including on massive data centers and research, has become an enormous growth engine for the US economy, accounting for anywhere from 50% to 90% of total GDP growth in 2025, according to various estimates. What happens if this bubble blows? Whether AI investment will lead to a boom or a bubble will dominate economic news for the rest of Trump’s term.

5. Immigration battles -- with the Trump administration’s ICE patrolling the streets and violently detaining even some US citizens and green card holders, border “encounters” have fallen to their lowest level in decades, averaging 15,400 per month (through November), compared with 137,200 in 2024. But the White House has also sharply curtailed legal immigration, which is adding to existing labor shortages, including in jobs usually filled by highly sought-after skilled professionals. Trump has imposed a $100,000 fee on new H-1B visas, which allow employers to temporarily hire skilled foreign workers in "specialty occupations" like health, tech, and science, especially important in rural areas.

Those are, more or less, five of the positives of Trumponomics so far. But there are significant storm clouds on the horizon, and falling consumer sentiment is increasingly reflecting that.

6. Increase in unemployment -- unemployment has climbed to 4.6% in November, the highest in over four years. More alarmingly, the rate of unemployment among young people and Black workers rose disproportionately, a kind of “canaries in the mine shaft” effect revealing a weakening job market. Job creation has slowed significantly, with the US creating only 55,000 jobs per month on average in the first 11 months of Trump’s second term, compared with 192,000 per month in the last two years of Biden’s term. The number of manufacturing jobs — a cornerstone of Trump’s job-creation strategy — also has fallen.

7. “Affordability gap” -- While the inflation rate hasn’t increased much under Trump, the “affordability gap” that plagued Joe Biden continues to squeeze everyday Americans. Many household items, groceries, utilities, and housing costs remain significantly more expensive than in 2024, leaving many families feeling financially pinched.

8. Soaring deficits/debt -- Donald Trump’s One Big Beautiful Bill, which significantly cut taxes for high-income taxpayers, will add at least $3 trillion to the deficit over the next 10 years and send the ratio of debt to GDP to a nearly Greece-like 130%, from just under 100% today. In an alarming sign, the federal deficit for 2025 now stands at $1.8 trillion, with interest payments on the debt hitting $1 trillion for the first time.

9. Health care breakdown -- Tens of millions of Americans are about to lose their health care as a result of the One Big Beautiful Bill. An estimated 10 million of the poorest and most disabled Americans will be forced off Medicaid, leaving them with no other health care than a hospital emergency room. In addition, a significant chunk of the 24 million Americans who lost their insurance premium supplements as of January 1, because the Trump administration failed to reauthorize them, will see their premiums approximately double, making health care unaffordable. As they drop off the rolls, much of the progress made by President Barack Obama’s Affordable Care Act in providing universal access is being undone.

10. Erosion of consumer and business sentiment -- frustrated by ongoing high prices for key goods and services, Americans’ anger and dissatisfaction have reached near-record levels. In November, consumer sentiment fell to the second-lowest level since tracking began in 1952 (behind only June 2022 during the COVID pandemic,c when inflation reached 9% and unemployment hit 14.8%). Business optimism has also taken a hit. From billion-dollar giants to mom-and-pop shops, bankruptcies are piling up across the US, with large corporate bankruptcies already hitting their highest level in 15 years as import-dependent businesses struggle with high tariffs.

As Joe Biden found out: Denial is not an economic policy

Mark Twain once said, “There are three kinds of lies – lies, damned lies, and statistics.” The partisan sides each have their preferred measurements about the state of the economy. Joe Biden and Kamala Harris never figured out that, while economic statistics describe the system as a whole, they don’t always reveal the actual lived experiences of everyday people.

President Trump continues to insist that America has “the greatest economy” with “no inflation,” but 74% of people think the economy is mostly poor and at best fair, with over half saying Trump’s economic policies have made it worse. Consequently, as President Trump prepares to kick off 2026, his popularity has sunk to a historic low. Only 36% of Americans approve of his presidency, the lowest of any president at the end of his first year in the past five decades, lower even than Joe Biden’s 40% approval rating when he left office.

It's worth noting that, in pursuit of his struggling economic vision, President Trump has sidelined even his own Republican-controlled Congress. He has issued a total of 225 executive orders in less than a year, more than he did in his entire first term and nearly three times as many as any other first-year president in over 40 years. Many of these likely exceeded the president’s authority. And this Do-Nothing Congress passed just 61 laws, only a small fraction of the number enacted annually between 1975 and 2005.

As the saying goes, “If you break it, you bought it.” This is Trump’s economy now; he can no longer blame Joe Biden.

Steven Hill was policy director for the Center for Humane Technology, co-founder of FairVote, and political reform director at New America. You can reach him on X @StevenHill1776.