Accelerated economic growth, slowing employment... A quick overview of Trump's 2.0 “First Year Report Card”

The Zhitong Finance App learned that in 2025, Trump successfully re-elected and entered the White House due to voters' dissatisfaction with the economy under the Democratic Party, promised to lower prices, and claimed that the US would bring a “golden age.” How has his administration done so far? Despite some sharp ups and downs, the US economy is expected to achieve steady growth in 2025 — a trend that economists expect will continue in 2026.

Data released last week showed that due to resilient consumer and corporate investment, the economic growth rate in the third quarter was the fastest in two years. However, these overall figures overshadow some less optimistic details. Employment growth is weak and concentrated in a few industries, and high prices are still a cause for concern, continuing the difficulties associated with spending power faced during the Biden era.

The following chart shows how the US economy will develop in 2025:

labor market

Affected by factors such as the impact of tariffs, the decline in foreign tourists, and the growing popularity of artificial intelligence in the workplace, this year can be described as difficult for American job seekers. The unemployment rate rose to 4.6 percent in November, 0.5 percentage points higher than the expected value for 2025, the highest level since 2021.

The overall recruitment situation is weak, and the number of new jobs in the US is mainly concentrated in the health care and social assistance sector: if this sector is excluded, the number of employed people actually declined this year. There have been seven consecutive months of layoffs in the manufacturing industry.

Wage growth for employed people is slowing down. According to the latest data, the growth rate of various indicators, including the average hourly wage and employment cost index, hit the lowest level since 2021. Atlanta Federal Reserve data shows that from April to November, the wages of at least 13% of employed workers had no increase compared to the same period last year.

In a situation where the job market is weak, workers with a four-year college degree have been hit hard. Their unemployment rate in November was 2.9%, which is still low compared to many other groups, but this is a level never reached without a recession.

Meanwhile, a Cleveland Federal Reserve study shows that monthly employment rates suggest that college-educated young people no longer have the same advantage in finding jobs as they used to be compared to those with only a high school degree.

The unemployment rate for black Americans also rose sharply this year, climbing from 6.2% in January to 8.3% in November, partly due to more black workers joining the labor market.

Consumer prices

The basic situation of inflation this year is that it has not fluctuated much. Despite a sharp decline from the peak of the pandemic, the current level of inflation is still higher than the level Americans were used to in the previous decade. The overall growth rate based on the consumer price index in November was 2.7%, which is the same as the 2025 average, but this figure may be affected by data disruptions due to the US government shutdown. Other indicators, such as those commonly used by the Federal Reserve, showed similar readings.

Most commentators believe that the sharp rise in prices during Biden's administration was one of the reasons Trump was elected president. Today, Trump is responsible for voters' concerns about the high cost of living — an issue that remains politically significant, judging by voting in November's non-presidential election year.

One advantage for Trump is that his tariff policy has not caused prices to soar as many economists have warned. He can also claim that gasoline prices have dropped. Gasoline prices have always been a hot topic of concern for voters. But there are signs that rising electricity costs — an issue highlighted in last month's Democratic campaign — may replace gasoline prices as a new hot topic.

White House spokesman Kush Desai said in a statement: “Over the past year, inflation has cooled, economic growth has accelerated, interest rates have declined, and real wages have finally risen. There is still a lot of work to be done in the new year, but as President Trump's policies continue to work, Americans can rest assured that the best is yet to come.”

trade war

Trump's most notable shift in economic policy was a shift to trade protectionism. Although the Trump administration has previously lifted some tariff increases, particularly those targeting China, Trump raised the 2025 tariff to the highest level in nearly a century.

Trump has said that high tariffs will raise funds for the government, reduce America's trade deficit that has existed for decades, and stimulate domestic commercial investment. On the one hand, import taxes are working and will increase revenue by around $30 billion a month by the end of 2025. On the other hand, the numbers fluctuate a lot and are currently inconclusive.

After Trump's election, there was one of the largest import surges in history at the beginning of the year, and US companies scrambled to bring goods into the country before the new president imposed tariffs. Since then, the trade deficit has declined somewhat.

business investment

As for Trump's third stated goal of the trade war, the results so far have been mixed. According to the latest data released on December 23, corporate fixed investment grew steadily in the first three quarters of 2025.

But this expansion is almost entirely driven by higher spending on computer equipment and software. Looking ahead, economists expect Trump's Big Beauty Act and continued investment in artificial intelligence to boost capital spending in 2026.