The US economy is showing signs of strain as President Donald Trump’s erratic approach to trade policy takes a toll. Applications for unemployment benefits jumped by 27,000 to 263,000 last week – the highest level since October 2021 – according to official data.
This follows a monthly employment report that showed the US added just 22,000 jobs in August, with the President’s unpredictable economic policies making employers more hesitant to hire. Separate data also showed US inflation picked up to 2.9% in August from 2.7% in July, driven by rising beef and petrol prices.
“The middle-class squeeze from tariffs is here,” warned Navy Federal Credit Union chief economist Heather Long. “It’s troubling that so many basic necessities now cost more,” she added, cautioning that “this is only the beginning.”
The figures will add to pressure on the Federal Reserve ahead of its meeting next week, where policymakers will decide whether to cut interest rates further. Mr Trump is applying maximum pressure on Fed chairman Jerome Powell to cut rates, but the central bank is worried that inflation could yet be rekindled by tariffs and a rebounding economy.
In a post on his Truth Social site this week, Mr Trump reiterated calls for a rate cut, adding: “Powell is a total disaster, who doesn’t have a clue!”
