US economic data is currently doing a rather impressive job of contradicting itself, sparking fierce debate over whether President Donald Trump’s delightful mix of trade policy chaos and federal spending cuts will push a slowing economy into outright disaster.
Surveys of consumers and businesses—affectionately referred to as “soft data”—paint a rather grim picture of what’s to come as Trump’s tariff-happy administration pushes ahead with plans seemingly designed to make economists weep. Meanwhile, the supposedly more reliable “hard data” from government statistics, such as employment and manufacturing, is stubbornly hanging on, suggesting that predictions of stagflation or even recession may be somewhat exaggerated.

But let’s not get too optimistic. The fact that two entirely different narratives clash in the data is doing nothing to calm nerves in Washington or on Wall Street. Just weeks ago, the US economy was basking in the glow of being the world’s most enviable performer. Now, it’s morphed into the single largest source of global uncertainty.
Fed officials have already downgraded their annual growth forecasts thr last week to their lowest level since 2022. The OECD, never one to shy away from bad news, insists that US trade policy will drag down economic activity worldwide.

So, what’s got everyone on edge? Well, surveys from the University of Michigan and The Conference Board are waving bright red flags about tariffs driving prices sky-high. Consumers apparently think inflation will rise at the fastest pace in three decades over the next five to ten years.
Fed Chair Jerome Powell did his best to downplay those worries, insisting that such inflation expectations were an “outlier” rather than a cause for sleepless nights. He also admitted that there’s little correlation between hard data and unreliable surveys, suggesting that it’s only logical for policymakers to keep interest rates unchanged until they have a better grasp of Trump’s chaotic policy-making.

Remember all that post-election optimism back in 2024 when Trump’s promises of tax cuts and deregulation made consumers, small businesses, and homebuilders feel as giddy as children on Christmas Eve? The joy seems to be evaporating now that tariffs and soaring prices for essentials like eggs—not to mention stock market meltdowns—are starting to spoil the party.
Of course, the Trump administration is doing little to allay these fears. The president and his advisors now admit that it may take months or even years for his promised “Golden Age” to materialise. And with yet another round of tariffs due on April 2nd, economists are bracing themselves for yet another confidence-shattering blow.

If you’re curious about the hard data, it’s a mixed bag, though generally less terrifying than the surveys suggest. Employment growth slowed in February, and unemployment ticked slightly, but the labour market remains robust overall. Inflation eased a little last month, clocking in at its slowest pace of growth in four months.
Manufacturing data has been a false prophet, though. US industrial production surged in February, but economists are already warning that this was primarily driven by companies scrambling to beat Trump’s new tariffs. And while housing construction picked up last month, it’s largely seen as a rebound from January’s miserable weather rather than any real recovery.
Consumer spending is the biggest worry here, with retail sales data showing a rather alarming slowdown, even when adjusted for inflation. But Powell remains committed to his “the economy is fine” mantra.

Uncertainty is hanging over the US economy like a particularly unpleasant fog. With all this chaos in the air, the Federal Reserve’s decision to keep rates on hold feels more like an act of desperation than strategy. When your best option is to wait and hope the economy doesn’t fall apart under the weight of Trump’s tariffs, things are not exactly rosy.