At a gathering of McDonald’s leaders, owners, and suppliers, President Trump declared that the U.S. is in its “golden age.” But Americans don’t seem to agree, and faith in protectionism may be fading.
Concerns about the U.S. economy are mounting. Americans are unconvinced by President Trump’s insistence that inflation isn’t a problem and life is getting better. Inflation has been stuck around 3% since July, and sticky prices suggest businesses expect prices to continue to go up, not down. Meanwhile, some analysts warn that the AI boom is masking what would otherwise look like a weak economy.
Now concerns are cropping up in the labour market as well. So far this year, just two sectors—health care and hospitality—have driven job growth in the U.S. September data shows the unemployment rate, while still low, has crept up to its highest level in four years. Even worse, the U.S. is losing the blue-collar jobs Trump aimed to protect.
But worse than economic results is Americans’ angst. Around 76% of Americans view the economy negatively, up from 67% in July and higher than at any point under President Biden. Many blame the sitting President for the deterioration. Consumers aren’t feeling great about their personal finances, either. After a slight rebound over the summer, consumer sentiment has dropped back to April levels which were essentially the lowest since the Great Recession.
Businesses don’t seem very optimistic either. While expectations for future sales are reasonable, the Economic Policy Uncertainty Index—which tracks uncertainty around government decisions and their economic impact—has risen to levels not seen outside the pandemic. Research shows that high uncertainty tends to weigh on future business investment.
All that said, not everyone sees trouble. Economist Claudia Sahm says the labour market is just normalizing, while Nvidia’s strong third quarter results suggest the AI boom is still real.
Part of the problem is that, for a country driven by data, the American economy is running in the dark. That’s because the lengthy government shutdown has delayed release of many of the statistics that would give a clearer picture of where it’s actually headed.
What does this mean for Canada? For now, we’re still in wait-and-see mode as U.S. data slowly trickles out. But signs suggest Americans’ patience is running thin. Even stronger economic results may not ease concerns, making it harder for President Trump to stay the course on trade and tariffs.
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