United States: Over the past week, the US economy has been impacted by a combination of significant developments — including weak job data, slower economic growth, and new tariffs on nearly 70 countries. These events have raised concerns among economists about the possibility of a recession and about the potential for political pressure on the country’s trusted economic data.
Yet, the stock market has barely flinched.
Since last Tuesday, the Nasdaq has inched up by 0.4 percent, the S&P 500 has dipped just 0.6 percent, and the Dow Jones has dropped 1.4 percent. Even with these small moves, all three remain significantly higher than they were three months ago — the Nasdaq is up 20 percent, the S&P 500 is up 13 percent, and the Dow is up 7 percent, according to ABC News.
Analysts say investors are still upbeat because:
- Company profits, particularly from major tech companies like Meta and Microsoft, are robust.
- The Federal Reserve might cut interest rates if growth slows.
- Many expect Trump won’t bring back the extreme tariffs from earlier this year.
Some experts believe the market’s confidence is self-sustaining — as long as stocks continue to rise, traders feel more willing to take risks.
Slowing job growth
Government data show that the US added an average of just 35,000 jobs per month between May and July — the slowest pace since 2020. That’s a big drop from the 128,000-a-month pace earlier this year. At the same time, GDP growth averaged 1.2 percent in the first half of 2025, much lower than last year’s 2.8 percent.
A sudden firing
Hours after the weak jobs report came out, President Trump fired Bureau of Labor Statistics Commissioner Erika McEntarfer, accusing her — without evidence — of manipulating the numbers. McEntarfer, appointed by President Biden and confirmed by both parties in 2024, said it had been “the honor of my life” to serve and thanked her team for their service, as reported by ABC News.
Why the market still looks strong
Even after the bad news, stocks bounced back within days. Strong corporate earnings have helped, especially from companies that have huge weight in the stock indexes. As one analyst put it, “The markets like to focus on earnings.”
The risks ahead
If slow hiring combines with high tariffs, the US could face stagflation — when prices rise but the economy barely grows. That’s a tricky situation for the Fed:
- Raising rates could cool inflation, but it would also slow growth even more.
- Cutting rates could boost growth, but it would likely make inflation worse.
For now, traders seem focused on today’s gains, not tomorrow’s risks. However, some warn that the market might be too relaxed about inflation and other dangers that could emerge in the months ahead.
