Donald Trump Is Everywhere Except in the Economic Data

Fears that tariffs, spending cuts would lead to inflation have yet to show up in the numbers

- Greg Ip

Imagine you didn't follow the news or social media and watched the world only through economic data. You would not have guessed the White House changed hands in January.

President Trump's deportations, tariffs, federal layoffs and funding suspensions have generated nonstop headlines and frayed confidence, yet left surprisingly little trace on the economy. Hiring, spending and inflation look a lot like they did under Joe Biden.

The disconnect is deeply disorienting. United Airlines, calling the economic environment "impossible to predict," this past week issued two outlooks for earnings: one with recession, and one without.

Economists surveyed by The Wall Street Journal think that hiring will slow sharply this year and that inflation will shoot up. So far, there's little evidence of either. Job growth has averaged 173,000 over the past two months combined, almost the same as that of the prior six months. The unemployment rate has averaged 4.2%, a tenth of a point higher than the prior six months. Both overall inflation and the Federal Reserve's preferred measure of underlying price pressures have averaged a tenth of a point less.

Elon Musk once said he could slash federal spending by $2 trillion. His Department of Government Efficiency, or DOGE, now claims a more modest $155 billion in savings. Yet in the first 80 days of Trump's administration, federal spending was $154 billion higher than in the equivalent period a year earlier, a Journal analysis found.

DOGE aimed to get rid of up to 10% of federal employees—about 240,000. Through February and March, though, federal employment excluding the post office is down just 10,100. Claims for unemployment insurance by former federal employees spiked in late February and early March but recently have averaged just a few hundred more per week than a year earlier.