Donald Trump’s message to US voters has been consistent as he seeks to win a second term in the White House: the economy under Joe Biden has been a disaster.
Until recently the hard data has not supported Trump’s argument. The US has been comfortably the fastest-growing of the G7 leading industrial nations since the Covid pandemic. Unemployment has been low by historic standards. America’s self-sufficiency in energy meant it suffered a less severe inflation shock than Europe after Russia’s invasion of Ukraine.
Yet the former US president now has some evidence to back up his case. The latest set of US jobs figures, released last week, showed the labour market cooling fast. Payroll growth in July slowed to 114,000 – about half the average of 215,000 in the previous 12 months and well below economists’ expectations. The unemployment rate rose from 4.1% to 4.3%.
That set alarm bells ringing. Financial markets have been betting heavily on the US economy being able to shrug off the impact of higher interest rates. The latest GDP figures – showing annual growth of close to 3% – supported that view.
