Trump economy at 18 months is a tale of shocks, resilience, and signs of stalled progress

By Howard Schneider and Saqib Iqbal Ahmed

WASHINGTON, July 27 (Reuters) - The first 18 months of President Donald Trump's second term in the White House have seen a series of policy-driven economic shocks, highlighted by the immigration crackdown and higher tariffs that he promised during his 2024 campaign, and an unanticipated war with Iran that has boosted the price of oil and threatened global supply chains.

While the U.S. economy overall has withstood the policy changes and Middle East ‌war better than many economists expected, Trump's vow to lower prices, boost factory jobs, and improve life for the middle class has yet to materialize, with the midterm elections a little more than three months away.

Resilient, yes, but the economy has also ‌stalled in many of the areas where Trump said that mass deportations of undocumented people and higher import taxes would trigger a boom, with the U.S.-Israeli war against Iran intensifying some key risks.

JOBS

The broadest measure of employment comes from the Bureau of Labor Statistics' household survey. Changes in population statistics in early 2026 mean BLS's published data ​is not strictly comparable from year to year, showing a sharp drop in employment and the number of people looking for jobs in January largely due to the new controls.

But the agency does use the new population estimates for an experimental series that looks back five years to create a consistent data set beginning in April 2020.

That data also shows declines in both the labor force and number of people working since Trump's return to office, a logical development given the efforts to limit immigration and increase deportations. Coupled with an aging native population, fewer people are available to fill jobs.

WHO'S HIRING

Trump said his policies would lead to a U.S. manufacturing revival, with jobs to follow. There has been an investment boom — in artificial intelligence data centers whose impact on output and jobs remains to be seen.

The AI investment has pushed construction employment higher. But payroll reports show fewer manufacturing jobs ‌than at the end of former President Joe Biden's administration. Biden left the presidency in January ⁠2025.

Some of Trump's priorities are reflected in the jobs data, such as the drop in the number of government workers.

But it's hard to reshape what an economy of 342 million people demands. It's a society that likes restaurants and bars. And it's one that is getting older and in need of more healthcare services.

Changes in hiring reflect that dynamic.