Trump Economy Hits Rough Start to 2026 03/09 06:25

   President Donald Trump promised that 2026 would be a bumper year for 
economic growth, but instead it has kicked off with job losses, rising gasoline 
prices and more uncertainty about America's future.

   WASHINGTON (AP) -- President Donald Trump promised that 2026 would be a 
bumper year for economic growth, but instead it has kicked off with job losses, 
rising gasoline prices and more uncertainty about America's future.

   In his State of the Union address less than two weeks ago, the Republican 
president confidently told the country: "The roaring economy is roaring like 
never before." The latest batch of data on jobs, pump prices and the stock 
market suggests that Trump's roar has started to sound far more like a whimper.

   There is a gap between the boom that Trump has predicted and the volatile 
results he has produced -- one that could set the tone in this year's midterm 
elections as he tries to defend his party's majorities in the House and Senate. 
With Trump's tariffs drama ongoing, the war in Iran has suddenly created 
inflationary concerns regarding oil and natural gas. To the White House, it is 
still early in the year and stronger growth is coming.

   No signs of a jobs boom

   "WOW! The Golden Age of America is upon us!!!" Trump posted on social media 
Feb. 11 after the monthly jobs report showed gains of 130,000 jobs in January.

   Since then, the job market has evaporated in worrisome ways.

   Friday's employment report showed job losses of 92,000 in February. The 
January and December figures were revised downward, with December swinging to a 
loss of 17,000 jobs. Monthly data can be rocky, but a trend has emerged that 
shows an enduring weakness. Without the health care sector, the economy would 
have shed roughly 202,000 jobs since Trump became president in January 2025. 
Still, his administration notes that construction job gains outside of the 
housing sector point to future hiring growth.

   Trump often brags that jobs are going to people born in the United States, 
rather than to immigrants. But the latest report punctured some of that 
argument.

   The unemployment rate for people born in the U.S. has climbed over the past 
12 months to 4.7% from 4.4%. This means a greater share of the people who Trump 
said would get jobs because of his immigration crackdown are, in fact, 
searching for work.

   Prices at the pump are going up

   "Slashing energy costs is among the most important actions we can take to 
bring down prices for American consumers," Trump said in a February speech in 
Texas just before the U.S. and Israel attacked Iran. "Because when you cut the 
cost of energy, you really cut -- you just cut the cost of everything."

   The president has repeatedly told Americans that keeping gas costs low would 
be key to defeating inflation. He has talked up the decline, citing figures 
that were far below the national average to assure the public that driving was 
getting cheaper.

   But the strikes against Iran that began Feb. 28 have, for the moment, 
crushed that narrative. Prices at the pump have jumped 19% over the past month 
to a national average of $3.45, according to AAA. The investment bank Goldman 
Sachs warned in an analyst note that, if higher oil prices persist, inflation 
could rise from its 2.4% reading in January to 3% by the end of the year.

   The administration is banking on plans to contain any energy price 
increases, essentially betting that either the conflict will end shortly or the 
administration can succeed in getting more tankers through the Strait of Hormuz.

   On Sunday as oil prices rose above $100 per barrel for the first time since 
2022, Trump sought to assure anxious Americans that it was a temporary problem.

   "Short term oil prices, which will drop rapidly when the destruction of the 
Iran nuclear threat is over, is a very small price to pay for U.S.A., and 
World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!," Trump posted on 
social media.

   Stocks are off their highs

   "You know, we set the all-time record in history with the Dow going to 
50,000," Trump said Thursday at the White House.

   This frequently repeated talking point has grown stale. The Dow Jones 
Industrial Average, one of Trump's preferred measures of success, has dropped 
5% over the past month. Stocks are up during his presidency, just as they were 
previously when Democrat Joe Biden was president. The recent decline could be 
reversed if the war with Iran ends and companies see solid profits over the 
next year and beyond. The recent dip, however, should be a warning sign as the 
administration has stressed the importance of more people investing in the 
stock market through vehicles such as "Trump accounts" for children.

   The stock market has become a barometer of how people feel about the 
economy, with stock investors tending to have more confidence and those without 
money in the markets being more pessimistic.

   Joanne Hsu, the director of the University of Michigan's surveys of 
consumers, noted that in February a "sizable" increase in sentiment among 
people owning stocks "was fully offset by a decline among consumers without 
stock holdings."

   Productivity is up, but workers aren't benefiting

   Trump can point to a win in that the economy has become more productive -- 
generating more value for each hour of work. That is a positive sign for 
long-term growth in the U.S. and a reflection of its strong tech sector.

   Business sector labor productivity climbed 2.8% in the fourth quarter of 
last year, the Labor Department reported Thursday. But the challenge is that 
the gains might not be spread to workers in the form of higher pay as labor's 
share of income last year fell to the lowest level on record, noted Mike 
Konczal, senior director of policy and research at the Economic Security 
Project, a nonprofit aligned with liberal economic issues.

   Economy grew at a faster pace under Biden

   "Under the Biden administration, America was plagued by the nightmare of 
stagflation, meaning low growth and high inflation -- a recipe for misery, 
failure and decline," Trump said at the World Economic Forum in Davos, 
Switzerland, in January.

   The scoreboard tells a far different story, one that makes Biden's track 
record in 2024 look better than Trump's performance last year. The U.S. economy 
grew at a 2.8% pace during Biden's last year, compared with 2.2% under Trump in 
2025.

   As for inflation, the primary measure used by the Federal Reserve is the 
personal consumption expenditures price index. It was 2.6% in both 2024 and 
2025.

   Trump has staked his economic argument on doing better than Biden. But while 
he has avoided the inflation spikes that haunted Biden's presidency, he has not 
delivered stronger growth or more hiring.