The US economy seems strong after a year of Trump, but is it really?

EDITOR'S ANALYSISWhile economic growth is strong, the gap between the haves and have-nots is widening.Published On 19 Jan 2026Over the past year, United States President Donald Trump has unleashed a slew of policies that have upended businesses, supply chains and jobs.Yet the US economy seems to be growing at a healthy clip, and the unemployment rate is in a safe zone.Recommended Stories list of 4 itemslist 1 of 4China says GDP grew 5% in 2025, among weakest expansions in decadeslist 2 of 4European leaders slam Trump’s tariff threats over Greenlandlist 3 of 4DOJ says won’t investigate ICE agent’s fatal shooting of Renee Goodlist 4 of 4Guatemala’s president declares 30-day state of emergency after prison riotsend of listThe reality, experts say, is that the stock market boom has helped to mask deeper underlying problems in the economy.Since taking office, Trump has imposed a range of tariffs on countries, including key trading partners, leading to predictions of inflation skyrocketing, manufacturing screeching to a halt and unemployment soaring.None of those scenarios came true.Inflation, while above the Federal Reserve’s target, was a modest 2.7 percent in December.The unemployment rate was relatively low, at 4.4 percent, last month. Gross domestic product (GDP) grew at 4.3 percent in the third quarter of 2025, the fastest in two years.“The shock and awe we anticipated just didn’t materialise,” Bernard Yaros, lead US economist at Oxford Economics, told Al Jazeera.Yaros said the limited fallout could be attributed to the relative lack of retaliation by other countries and the stock market rally that quickly followed Trump’s dialling back of the steepest tariffs announced on “liberation day“.Since Trump’s April 2 announcement, the stock market, which is heavily weighted towards the “magnificent seven” tech companies, has risen nearly 30 percent, boosting Americans’ paper wealth and encouraging households to loosen their purse strings.Gains in net wealth have driven almost one-third of the rise in consumer spending since the COVID-19 pandemic, Oxford Economics said in a research briefing in October.