Economists and news outlets say new economic indicators show economic trouble ahead

• University of Michigan economist Justin Wolfers: Census Bureau data shows that “Americans responded (sharply!) to the Trump tariffs *before* they were even imposed” by importing extra goods to avoid “paying the higher prices that would occur when he was in office.” Wolfers added: “This also gives you a sense of who to blame for somewhat higher inflation in January. No, he wasn't in office yet. But suppliers know buyers need to buy ahead of future tariff-afflicted price hikes, and so likely felt little pressure to offer their usual discounts.” [Bluesky, 2/28/25, 2/28/25]

• University of California, Berkeley economist Jesse Rothstein: “It seems almost unavoidable at this point that we are headed for a deep, deep recession” due to Trump’s policies. Rothstein wrote: “Just based on 200K+ federal firings & pullback of contracts, the March employment report (to be released April 4) seems certain to show bigger job losses than any month ever outside of a few in 2008-9 and 2020.” [Bluesky, 2/18/25]

• Washington Post economic columnist Heather Long, citing new data from the Bureau of Economic Analysis, wrote: “Warning sign for the economy: Big drop in consumer spending in January. Personal consumption expenditures *decreased* 0.2%.” Long added: “Look at the categories with big drops -- car parts, recreational stuff, appliances, furniture, clothing -- a lot of this is ‘nice to haves’ that people cut first when times get tough.” [Twitter/X, 2/28/25]

• Center for Economic and Policy Research senior economist Dean Baker noted that “January had the largest drop in consumption spending in four years,” and called it a “recession-type drop in spending.” [Twitter/X, 2/28/25, 2/28/25]

• Former Council of Economic Advisers Chairman Jared Bernstein: The drop in consumer spending is “concerning and consistent with consumer angst re tariffs, uncertainty.” [Twitter/X, 2/28/25]

• Center on Budget and Policy Priorities senior director for federal fiscal policy Brendan Duke on the drop in consumer spending: “Do wonder if a big economic effect of the Trump Administration's attacks on federal employees and contractors is that they and their families are pulling back on consumer spending because they are *worried* about losing their jobs even if they haven't lost them yet.” [Twitter/X, 2/28/25]

• Nobel Prize-winning economist Paul Krugman on the drop in consumer spending: “Consumers already seem worried about policy madness, and they ain't seen nothing yet.” [Bluesky, 2/28/25]

• According to two surveys, consumer confidence has slumped to a level that “usually signals a recession ahead.” Two consumer confidence surveys for February, released just days apart, indicated that public perceptions of the economy have worsened significantly since Trump took office, with fears of “tariff-induced price increases” dragging down consumer sentiment in a survey published by the University of Michigan, and nagging worries about “income, business, and labor market conditions” driving down sentiment in a survey published by The Conference Board. Both surveys were weaker than economists had expected, with the University of Michigan’s index registering the highest inflation expectations since 2023, and the Conference Board’s survey falling to a level that “usually signals a recession ahead.” [The Wall Street Journal, 2/21/25; The Conference Board, 2/25/25]

• CNN: “The stock market had its worst week of Trump’s presidency – the Dow lost 1,200 points over the course of Thursday and Friday” as “investors grew fearful that the weakening consumer sentiment could lead to a pullback in Americans’ shopping habits.” CNN also quoted FWDBonds chief economist Chris Rupkey telling investors, “The public’s fears have soared in just the last two weeks showing the blizzard of changes coming from the president’s desk have spilled over the line between pro-growth into the realm of pro-inflation. … Once inflation expectations start moving higher it is only a matter of time before actual inflation takes off.” [CNN, 2/24/25]

• CNBC: “Weekly jobless claims jump to 242,000, more than expected in latest sign of economic softening.” On February 27, CNBC reported that “jobless claims for the week ended Feb. 22 totaled a seasonally adjusted 242,000, up 22,000 from the previous week’s revised level and higher than the Dow Jones estimate for 225,000.” CNBC explained that “the level of claims matched the highest since early October 2024 and comes amid questions over broader economic growth and worrying signs in recent consumer sentiment surveys” and amid Trump “taking aggressive measures to reduce the federal workforce.” [CNBC, 2/27/25]

• Bloomberg: “Trump Risks American Consumer Backlash Over Tariffs, Poll Shows.” Bloomberg reported that a Harris Poll found that “almost 60% of US adults expect Trump’s tariffs will lead to higher prices,” and “44% say the levies are likely to be bad for the US economy.” [Bloomberg, 2/27/25]

• CNBC: “The Federal Reserve’s favorite recession indicator is flashing a danger sign again.” CNBC reported: “The 10-year Treasury yield passed below that of the 3-month note in trading Wednesday. In market lingo, that’s known as an ‘inverted yield curve,’ and it’s had a sterling prediction record over a 12- to 18-month timeframe for downturns going back decades.” [CNBC, 2/26/25]

Trump supporters have been warning that his agenda calls for “hardship”

• Elon Musk said during an October 25 telephone town hall that Trump’s agenda “to reduce spending to live within our means … necessarily involves some temporary hardship.” Since then, Musk has become the embodiment of the so-called Department of Government Efficiency (DOGE), which is reportedly responsible for many federal firings and spending freezes. [The New York Times, 10/29/24; The Associated Press, 2/21/25]

• Musk later agreed with an X user who wrote that there will be an “initial severe overreaction in the economy” and that the “market will tumble” as Trump enacts his agenda. Musk replied on October 29, “Sounds about right.” [The New York Times, 10/29/24]

• Fox News host Laura Ingraham: Trump’s agenda will be “tough for the economy. There is no doubt about it.” Ingraham added: “People have to get, as my father would have said, real work, real jobs. People are going to have to get jobs and they're going to be scrambling.” [Fox News, The Ingraham Angle, 11/20/24]

• Podcaster Jason Calacanis: “DOGE is going to require collective sacrifice.” He wrote: “Getting Americans & their representatives to decline funding the government has ALREADY promised them, and that they fought hard to get, is going to be an extremely difficult task.” [Twitter/X, 11/22/24; Vox, 11/12/22]

• Then-Fox contributor Tammy Bruce (now a government spokesperson): People are going to lose their jobs, “and it's going to be good, because yes, more jobs will be created in the private sector for them.” [Fox News, Hannity, 12/5/24]

• Fox host Todd Piro: “Now, admittedly, we're going to have some tariffs, and that's going to raise prices. But the overall impact on the economy, hopefully, when Trump takes over, will make people feel better. And then when people feel better, the economy is better.” [Fox Business, Varney & Co., 12/11/24]

• Heritage Foundation economist Stephen Moore on government jobs: “I guarantee you that number is going to be down next month, because we’re already seeing the Trump administration really shred jobs in the government sector.” [Media Matters, 2/7/25]

• Fox Business host Charles Payne: “States are going to have a lot of their own sort of comeuppance, if you will” from the Trump administration cutting spending. Payne also claimed the Biden administration “tried to goose these numbers” with “a lot of money [that] was parceled out to states.” [Fox Business, Mornings with Maria Bartiromo, 2/7/25]

• Faulkner on DOGE gutting the federal government: “There will be some fallout, because people will be losing their jobs.” [Fox News, Outnumbered, 2/18/25]

• MAGA radio host Dan Bongino: People need to “take it on the chin” and “sacrifice for a little bit” for Trump’s policies. Bongino said: “We’re just asking you to sacrifice for a little bit for the long-term prosperity of the United States. Now’s the time. … We’re all going to take it on the chin a little bit. Rich guys, poor guys, middle class guys, someone’s going to lose their tax cut. It is time to take it on the chin. We have to fix this thing now, not tomorrow.” [The Dan Bongino Show, 2/18/25]

• Payne suggested it could be positive if Trump creates a recession. After a guest pointed out that President Ronald Reagan “came into office in 1981, that he slashed federal head count and actually put the economy back into the double dip recession of 1980 and 1981,” Payne responded: “I agree with you 1,000% that when you change something that's like this, lot of cash floating around, maybe there's a little temporary pain. We also end up calling it investing.” [Fox Business, Making Money, 2/26/25]