David Brooks:
Well, inflation is still over what the Fed wants. It’s 2.9, and they set a target of 2. So they’re in a bit of a pickle. They might cut a little bit, 25 basis points, but it’s hard to see them cutting a lot more because of the inflation threat.
This is caused by — as Austan Goolsbee sort of suggested earlier in the program, I think it’s caused by uncertainty about the tariffs, but then also the cuts in immigration. 2025 could be the first year in American history where America loses population. And immigrants, whether you like high immigration or don’t, they’re an economic boon to the country.
And if you take away all that labor, you’re taking away a source of economic strength. One of the things that was more interesting about the report was that the number of manufacturing jobs lost last month was 12,000, and that brings the total number of lost manufacturing jobs under the Trump administration of 78,000 people.
That’s not what he was promising when he was running. So he’s really not helping. And, finally, the most depressing thing for me and the most concerning is attitudes about what’s happening. The Wall Street Journal had a poll out earlier this week where they asked people, do you think there’s a chance, any chance, your living standard will go up? Only 25 percent of Americans say that.
That’s the lowest level since 1986. Something weird has happened about people’s view of the country and the economy. There’s a way to predict how people will view the economy based on economic statistics. And up until COVID, the statistics and the consumer sentiment rose and fall together.
After COVID, they’re totally diverged. The economic statistics look pretty good, but the people’s view of the economy is cratering. And that’s just a generalized loss of faith, the growth of pessimism.
