Is a Trump Slump on the Way?
The American economy seems headed in the opposite direction of the “golden age” Donald Trump promised in his inaugural address.
“Normal” capitalism is never a picnic for the working class, but full-blown recession is far worse. (Yasin Ozturk / Anadolu via Getty Images)
It’s been a long time since the United States had a “normal” recession. COVID-19 brought on a brief, sharp downturn in early 2020, but it was not a “normal” one of the sort that capitalism produces regularly. The last business cycle recession was the one often called “great” because of its length and depth. It formally lasted from January 2008 to June 2009 and lingered for many more months. Almost nine million jobs disappeared, and it took over six years to regain them.
It was very bad, but it was hardly unique. Since World War II, according to data from the National Bureau of Economic Research, the official arbiter of booms and busts, we’ve had a recession once every five and a third years. The “great” one began eighteen years ago. Are we on the verge of another?
We’re not in one, say the conventional indicators, but the US economy looks to be stalling, as it often does before the onset of formal recession. August’s employment report was a dud, and revisions to earlier data showed a small loss in June, the first minus sign (excepting the disease-ridden year 2020) since 2010. Job gains have averaged 70,000 a month since January, a fifth as much as Joe Biden’s 336,000. Biden’s number was greatly boosted by the sharp recovery from the pandemic crisis, but Donald Trump’s record so far is almost 70 percent below the 2010–19 average.
And it’s not just the headline numbers that look limp. Sadly for Trump’s tariff strategy, which supposedly aims to make American factories hum again, manufacturing has lost 33,000 jobs since January, and executives in that sector are full of complaint. Respondents to the Institute for Supply Management’s monthly survey used phrases like these to describe business conditions: “Tariffs continue to wreak havoc.” “The trucking industry continues to contract. . . . This current environment is much worse than the Great Recession of 2008–09.” “The administration wants manufacturing jobs in the U.S., but we are losing higher-skilled and higher-paying roles. With no stability in trade and economics, capital expenditures spending and hiring are frozen. It’s survival.” This doesn’t sound like the “golden age” Trump promised in his inaugural address.
Trump Doesn’t Want to Hear the Bad News
Employment growth had been slowing for years from the blistering pace of 2021 and 2022, when people were returning to their jobs after the pandemic bloodletting. Growth slowed in 2023 and 2024 to a more normal pace but was beginning to slow to subnormal in the early months of 2025. Things took a gloomier turn when the employment report for July was released on August 1. It was a stinker.
Job gains for the month were weak, a fraction of recent averages, and the gains for the previous two months were revised down sharply. Such revisions are routine every month, as late responses to the Bureau of Labor Statistics’ (BLS) survey of employers (the source of these numbers) roll in, but these revisions were unusually large.
Angry at all this bad news, Trump did a very Trumpy thing: he fired the director of the BLS, Erika McEntarfer, and nominated a partisan hack from the Heritage Foundation, E. J. Antoni, as her replacement. (More on him in a moment.) Trump claimed: “The Economy is BOOMING under ‘TRUMP’” (quotation marks around his name in original) and McEntarfer and her colleagues were faking the numbers “for political purposes.”
Then came two more bits of bad news in September: the employment report for August, released on August 5, which was even weaker than July’s and included a revised estimate for June — which it had already marked down in the previous release — from a modest gain to a modest loss. Four days later, on September 9, the BLS disclosed that it had been hugely overestimating employment earlier this year — by 911,000, to be precise.
This requires exploring some technical details. The monthly employment reports are based on surveys of employers, 121,000 businesses and government agencies, and a separate survey of 60,000 households. The employer survey is the source of the monthly job creation (or destruction, sometimes) numbers; the household, of the unemployment figures, plus a lot of demographic data on the labor market.
Household numbers are only lightly revised, but the employer survey numbers are heavily revised. Not only are there the regular revisions to the previous two months of data with every fresh release, every year the BLS also does a “benchmark” revision by comparing the monthly numbers from the employer survey with the near-complete coverage of the formal employment universe by the unemployment insurance (UI) system. It then marks its estimate of employment up or down accordingly. (The September 9 release was a preliminary estimate of that revision; it will be finalized early next year.)
Benchmark revisions are usually small — on average, about 0.2 percent up or down. Last year’s was twice that, and this year’s three times. This could be the result of the rise in immigration; it’s quite possible that the undocumented might be reported as employed in monthly surveys but not appear in the UI system. In any case, it was both embarrassing for the BLS and bad news for American workers.
Other data from the BLS adds some further perspective to that bad news. The period of tight labor markets, 2021–22, when employers claimed to be unable to fill job openings and pundits kvetched that nobody wanted to work anymore, is long over. Unfilled openings, according to a Bureau survey of employers, which peaked at more than twice their historical average in March 2022, are back to pre-pandemic levels. Back in those days, workers could get an unusually large pay boost by switching jobs; according to the Bank of America’s monitoring of its customer accounts, that advantage is gone. Unemployment has been drifting slowly higher and the share of the adult population working for pay, the employment/population ratio, has been drifting lower, both since early 2024.
It’s not a full-blown recession. But it’s looking like an overture to one.
“Normal” capitalism is never a picnic for the working class, but full-blown recession is far worse: millions of jobs lost, state and local government budgets cut, homeowners foreclosed upon. And tariffs, federal government layoffs, and cuts to federal social spending will only make things worse. You can almost see why Trump wants to shoot the messenger.
A Cheer for the Bureaucrats
Trump isn’t the first president to have it out for the BLS, but it’s been over fifty years since one did.
With the economy ailing as his reelection campaign approached, Richard Nixon looked for people to blame, and he started with Arthur Burns, the staid Republican chair of the Federal Reserve, whom Nixon had appointed. Nixon wanted lower interest rates and wasn’t getting them from Burns — and he didn’t like the employment numbers the BLS was putting out either. He instructed his personnel advisor, Fred Malek, to count the number of Jews at the BLS (which Malek did by looking at surnames and guessing). Nixon thought the Jews at the BLS were a cabal that conspired with Burns, who was Jewish, to make him look bad.
Nixon didn’t get all he wanted, but the BLS commissioner, Harold Goldstein, was moved to an obscure post and several Jewish staffers were reorganized out of their jobs. Nixon’s actions, though, had no lasting effect on the Bureau.
But Trump’s moves, which are part of a broad strategy to eviscerate the civil service and undermine the federal government’s capacity to do constructive things, could have a lasting and serious effect.
Trump described his nominee to head the BLS with one of his favorite phrases, “highly respected,” but Antoni is anything but. He has no reputation as a labor economist, or an economist of any kind, really — both mainstream and conservative economists have criticized his work as lacking basic knowledge. He was part of the mob outside the Capitol on January 6, 2021. His floridly reactionary social media history includes sexually insulting slurs against Kamala Harris, 2020 election conspiracy theorizing, homophobic taunts, COVID denialism, and an accusation that Paul Krugman is a pedophile. But he’s a Trump loyalist, and therefore perfect for the BLS job in the president’s eyes.
It may seem odd to celebrate bureaucrats, but the BLS and the other statistical agencies do excellent and important work. They produce timely and accurate pictures of an enormous and complex country. Anyone mounting a critique of American society can find a lot to work with in their data — not just on the labor market, but also poverty, health, and the environment. I’ve talked to many of the data-gatherers over the years, and they’re with few exceptions admirable public servants who take their work very seriously — the opposite of the Trumpian sorts.
The BLS had some misses in recent years. They often do at turning points, when the economy is either accelerating or decelerating; their techniques can take some time to catch up. Immigration may also be complicating their work. Trump says his moves will fix a “broken” agency, but it’s not broken, and he’s already making it worse. A third of the senior positions at the BLS are unfilled, thanks to Trump’s employee buyouts. Those departures follow years of serious underfunding. And now he’s deploying a hack to run it (though it’s not clear he’ll get confirmed by the Senate — that’s how egregious he is).
This is Trump’s America: things will get worse, but we won’t be able to take accurate measure of how much worse because the folks right-wingers disparage as bean counters have mostly been fired and their tasks left to propagandists.