Donald Trump is back in the White House, but his first jobs report is delivering unexpected news. The U.S. job market is already thriving, with businesses hiring and wages rising. In January alone, the economy added 143,000 jobs. On the surface, that sounds like a victory—but is it really? The situation is far more complicated than it seems.
Under Joe Biden, the economy rebounded from the COVID-19 crisis, pushing unemployment down to a record-low 3.4% at one point—the lowest since the 1960s. Black unemployment even hit a historic low of 4.8% in 2023 before creeping back up. Industries like hospitality and retail saw massive growth, and a combination of immigration and remote work kept businesses running smoothly. Now, Trump is stepping into an economy that’s already in motion, leaving many wondering: how will he make good on his promise to create more jobs?
The challenge is clear. The job market is stable, and experts, including Chicago Federal Reserve President Austan Goolsbee, believe it’s in a good place. “If you could freeze the job market just exactly where it is, that is not a bad spot,” he said. But the economy never stands still. If Trump pushes too hard to stimulate job growth, inflation could spike, driving up prices for everyone.
We’ve seen this play out before. In the 1960s, rapid economic expansion led to runaway inflation, triggering a slowdown in the 1970s. Similarly, George W. Bush’s tax cuts and heavy spending in the early 2000s contributed to the Great Recession. Trump now faces the delicate task of fueling growth without overheating the economy. The Federal Reserve is already wary, aiming to keep wage growth below 4% to control inflation—yet it’s currently above that threshold.
Another major difference between Biden and Trump? Immigration policy. Under Biden, an influx of foreign workers helped stabilize wages and filled critical roles in construction, agriculture, and hospitality. Trump, however, wants to tighten immigration laws. While this aligns with his campaign promises, it could also leave industries struggling to find workers, potentially pushing wages higher and stoking inflation.
Tariffs are another wildcard. Consumer confidence has already dipped, with one-third of consumers mentioning tariffs in a recent survey—compared to just 2% before the election. Concerns are mounting that Trump’s aggressive trade policies could drive up costs for businesses and consumers alike, fueling inflation fears. In fact, inflation expectations just saw one of their biggest monthly jumps in 14 years. If consumers start pulling back on spending due to rising prices, economic momentum could slow dramatically.
Despite these concerns, Trump remains confident in his ability to deliver job growth. In a recent interview, he doubled down on his economic promises, insisting his policies will create more jobs than ever. However, the data tells a different story—the economy is already adding jobs at a steady rate. Pushing too hard could backfire, triggering inflationary pressures that could do more harm than good.
So what’s the best move for Trump? Some experts argue that he should let the economy continue its natural trajectory. But Trump isn’t known for patience. If he pushes too aggressively, inflation could spiral. If he pulls back too much, job growth could stall. Either way, the stakes couldn’t be higher, and all eyes are on his next move.
