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inflation
Chances of a Recession Hiked to 35% as Trump's 'Liberation Day' Tariffs Loom
"Don't use his term 'liberation day'! Call it Trump's devastating trade war! He has caused maximum uncertainty, likely to drive the U.S. economy to a near halt," wrote one economist.
Mar 31, 2025
As U.S. President Donald Trump gears up to unveil yet another round of tariffs this week and observers warn of potential "stagflation," the Wall Street giant Goldman Sachs on Sunday published a research note projecting that the chance of a recession in the next 12 months stands at 35%, up from 20%.
"The upgrade from our previous 20% estimate reflects our lower growth baseline, the sharp recent deterioration in household and business confidence, and statements from the White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies," according to the research note.
Trump has previously said he plans to unveil a slate of reciprocal tariffs on April 2—a day he has dubbed "Liberation Day"—and on Sunday he said they would impact "all" countries to start. The announcement rattled financial markets globally on Sunday, and stocks continued to fall on Monday. The S&P 500 dropped by over 1% at the start of trading, and the index is on track for its worst month since September 2022, according to The New York Times.
"Don't use his term 'liberation day'! Call it Trump's devastating trade war! He has caused maximum uncertainty, likely to drive the U.S. economy to a near halt," wrote the economist and author Anders Åslund wrote on Bluesky on Saturday.
In the research note, Goldman Sachs analysts said they expect Trump's reciprocal tariffs to average 15% across all U.S. trading partners, though product and country exclusions may bring that average down.
Trump has already imposed blanket tariffs on China and blanket tariffs on traditional trade allies like Mexico and Canada, with some carve outs for certain goods. The administration has also enacted global aluminum and steel tariffs, and announced last week that it would impose 25% tariffs on autos and auto parts that are not produced in the U.S. The government will commence collecting the import tax on April 3.
Economists generally agree that tariffs—a tax on imports from other countries—are a cost that is largely passed on to consumers, though tariffs can be used to support domestic industries by promoting consumption of domestic-made goods.
In early March, U.S. Rep. Chris Deluzio (D-Penn.) penned an op-ed in the Times warning against "anti-tariff absolutism" on the grounds that they can be used as one part of a broader industrial policy to revitalize American manufacturing.
"Mr. Trump's tariff approach has been chaotic and inconsistent. There's no doubt about that. But the answer isn't to condemn tariffs across the board," Deluzio wrote.
Last week, United Auto Workers (UAW) president Shawn Fain, historically a Trump critic, praised the decision to impose auto tariffs.
"The UAW and the working class in general couldn't care less about party politics; working people expect leaders to work together to deliver results," said Fain in a statement. "We will work with any politician, regardless of party, who is willing to reverse decades of working-class people going backwards in the most profitable times in our nation’s history. These tariffs are a major step in the right direction for autoworkers and blue-collar communities across the country."
Meanwhile, Goldman Sachs also predicts higher inflation and lower gross domestic product (GDP) growth. Higher tariffs are likely to increase consumer prices, according to the analysts, who raised their yearend 2025 inflation forecast by 0.5 percentage points to 3.5%, above the Federal Reserve's target inflation rate of 2%.
Also as a result of tariff news and first quarter GDP data, Goldman Sachs has lowered its 2025 GDP growth forecast by 0.5 percentage points to 1%, when measured from the fourth quarter of 2024 to the fourth quarter of 2025. Also, the report's analysts now projects unemployment reaching 4.5%, a 0.3 percentage point increase from the previous forecast.
The Irish journalist and economic commentator David McWilliams warned in an opinion piece published Monday by Common Dreams that the "combination of a rapidly weakening economy and fear of inflation points to an old enemy not seen since the 1970s: stagflation, where unemployment and inflation rise together."
Other observers have also warned that stagflation could be looming.
"Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families," said Alex Jacquez, the chief of policy and advocacy at the Groundwork Collaborative, in a statement earlier this month. "It is, however, a perfect recipe for stagflation."
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A Jeremiad for the Working People of the United States
The prevailing issue that demands consensus is the economic exploitation and deprivation of our economic model for working people of all demographics.
Mar 25, 2025
The oligarchs are laughing. The corporatists are laughing.
They are laughing at working people as the big con continues. They are laughing at the corporate Democratic Party whose genetic code lacks the heart to challenge the autocracy now unfolding. “Good billionaires vs. bad billionaires.” Really?
The political left spectrum is largely catatonic. Progressives lament the ineffectiveness of their wing of the Democratic Party. “Outsider” leftists are skeptical of both political parties, but too small in numbers yet to pose a threat to corporate Democrats.
The time of milquetoasts is over. It is time to recognize what must be done.
Liberals on the left spectrum are flummoxed; some stalwarts attribute their recent political debacle to the inability of the Democratic Party to distribute a cogent message of their accomplishments.
It was not the message that flopped. Rather economic numbers proved that our economic model continued to squash the interests of working people. They then sent a clear message that they were not buying the corporate Democratic dose of doldrums. They voted for President Donald Trump.
Economic Classes
Working people are comprised of the middle-working class and working class. The middle-working class identifies itself as “middle class.” The term is designed to divide working people.
Economic class has nothing to do with salaries or wages; it is about economic power. “Middle class” interests are closer to the working class than the dominant economic class.
Michael Zweig pointed this out in an insightful book in 2000 and revised in 2012. He identified the working class at 63% and the middle class at 35%. The combination presents a significant percentage of Americans who live and work largely by the undemocratic capriciousness of the 2%.
Real Economic Numbers
The income disparity in our country is at record levels as reported by the Congressional Budget Office. The income gap between the rich and everyone else is stunning. Income disparities are now so pronounced that America’s richest 1% of households averaged 139 times as much income as the bottom 20% in 2021.
The wealth disparity is just as shameful. Statista reported that in the first quarter of 2024, almost two-thirds of the total wealth in the United States was owned by the top 10%; the lowest 50% only owned 2.5% of the total wealth.
Make no mistake, If Americans do not take seriously the activities of the dominant economic class, it will be too late for working people.
The Ludwig Institute for Shared Prosperity (LISEP) reported an actual unemployment rate. LISEP tracks the percentage of the U.S. labor force that does not have a full-time job, wants one, has no job, or does not earn a living wage, conservatively pegged at $25,000 annually before taxes.
Their actual unemployment rate for this January was 23.3%.
Shadow Government Statistics (SGS) reported another actual unemployment rate. A significant demographic was mysteriously defined out of the Bureau of Labor Statistics (BLS) in 1994. Those discouraged workers who searched for work for more than one year simply vanished from the BLS unemployed numbers.
SGS reported that the actual unemployment rate for this January was 26.8%.
Inflation
The government’s Consumer Price Index (CPI) is a measure of the cost of maintaining a constant standard of living and measuring the cost of out-of-pocket expenses. However, since the 1980s the BLS has been altering its methodologies to decrease the actual inflation rate provided to the public.
The BLS ignores food and energy prices in “core” inflation numbers as if food and energy are not basic necessities for living.
The BLS transitioned from their historic fixed-weight basket of goods and services to a quasi-substitution-based basket of goods.
It also changed from arithmetic weighting to geometric weighting and to owners’ equivalent rent (OER) numbers.
Another BLS method to decrease the real inflation rate was a transition to hedonic measures, which actually attempts to measure how much enjoyment a person receives from changing from one product to another.
These changes reflected the BLS intentional artificial deflation of accurate CPI numbers from the American public.
SGS reported that the actual inflation rate for this January was 10.81%.
Big Picture Not So Good
Naturally, working people are seeking relief from this economic suffocation; according to the Council on Foreign Relations we have the largest disparity in wealth and income than any other developed country.
Good paying manufacturing jobs with other benefits left the country in dramatic numbers in the 1960s and 70s. How did this happen?
We can begin with an abysmal fact:
The economic empire of the U.S. is presently over, done, finished.
Our demise began when corporations moved to countries with low wages, regulations were minimal or nonexistent, and unions were absent. This was paradise for the corporate owner class.
This trend is continuing, and those good paying jobs are gone with no reason to return despite the bluster and gibberish emanating from the Trump administration.
The Economic Policy Institute reported that the U.S. lost 5 million manufacturing jobs in the last 25 years. To place our country in an advantageous position again will require transformation to a different economic model with smart negotiations and intelligent diplomacy with other countries.
A troubling result of the massive exodus of manufacturing jobs is the U.S. declining Gross Domestic Product (GDP). Consider in 2024, the GDP of the U.S. grew 2.8%; the GDP of China grew 5%. India, another member of the BRICS economic bloc, grew 5.6%.
Economic Tree
It is not that complicated here.
Our economic model is characterized by an economic tree for working people. At the root of the tree is the primary issue of wages and salaries.
Moving up the tree are branches that comprise secondary issues. They are viable employment opportunities; effective, affordable healthcare; comprehensive educational opportunities; comfortable, secure housing opportunities; wholesome nutrition; safe, reliable transportation; environmentally clean water, air, and land.
Will progressive organizations coalesce into a national movement for economic and political democracy and seize the Democratic Party?
The third branch are cultural issues: They are reasonable gun control, effective immigration reform, women’s healthcare rights, and LGBTQ rights. These issues are important to their demographics; however, they have been manipulated into wedge issues that distract working people from the real source of their discontent—that is the political power that maintains the privilege and power of the dominant economic class.
Working people must accept cultural issues without necessarily agreeing with them. The prevailing issue that demands consensus is the economic exploitation and deprivation of our economic model for working people of all demographics.
Emphasizing cultural issues with so called “woke” identity politics over economic class politics has resulted in the grotesque policies of Mr. Trump and the Republican Party cult.
It is these tertiary issues that Mr. Trump used to provoke and frighten MAGA working people. It distracted them into ignoring their economic class malaise.
An effective political party must work to transform primary issues into an inclusive party. Until then, cultural issues will be little but distractions for marginalized groups without actual progress for their causes; Democrats will continue to bay in the wind and lose elections while an autocratic political model is established. Project 2025 is that model and a blueprint financed by the corporate and oligarch class.
A Smart Direction
The shelf life is over for assorted corporate Democrats and corporate union leaders. Their vapid strategies and tactics unwittingly encouraged working people to support Mr. Trump. Consider that Sen. Bernie Sanders (I-Vt.) defeated Mr. Trump in polls in 2016 and 2020. Yet the Democratic Party corporate sycophants denied Sen. Sanders the nomination.
The time of milquetoasts is over. It is time to recognize what must be done.
The arc of our progressive history includes the abolitionists, labor rights, women’s suffrage, civil rights, anti-war activities, and environmental movements. All had a common theme: They were mass movements that began as large groups of people who knew they could do better.
This may be what it requires to shake us free from the dehumanizing, exploitative crimes and corruption of neofascism that Mr. Trump and his MAGA cabal have been implementing. As contradictions sharpen and immiseration increases, the choices are stark.
Make no mistake, If Americans do not take seriously the activities of the dominant economic class, it will be too late for working people. The flurry of political attacks on our Constitution are not some frivolous actions that will be remedied in two or four years. The Trump cabal is playing the long game. Even the legal foundation of American democracy, Marbury v. Madison, is in jeopardy.
The judicial branch may strike down some of the more absurd legal and constitutional excesses of Mr. Trump’s supporters. However, his cult leaders of Project 2025 are preparing for a permanent autocratic model to replace our democratic republic. It will have the veneer of democracy, but will be an autocracy in form.
Remedies
Each day, the administration plows ahead with truculent policies chipping away at the lives of working people. Will the time arrive for working people to create a national database of progressive organizations as an informational foundation for an authentic progressive movement? Will it facilitate petitions, mass demonstrations, civil disobedience, and general strikes?
Will progressive organizations coalesce into a national movement for economic and political democracy and seize the Democratic Party? Third-party options, while advancing democracy, are chimerical at this time. ICE is the new Gestapo, and waiting for a new political party to emerge is delusional.
Will our spiritual and secular organizations lead a movement or remain docile?
Pope Paul VI wrote Populorism Progressio in 1967. He stated that the restructuring of society was a welcome possibility. Though he admonished against violent means, he acknowledged a form of violence was an option:
Everyone knows, however, that revolutionary uprisings—except where there is manifest, longstanding tyranny which would do great damage to fundamental personal rights and dangerous harm to the common good of the country—engender new injustices, introduce new inequities, and bring new disasters. The evil situation that exists, and it surely is evil, may not be dealt with in such a way that an even worse situation results.
The question must be asked about a time table for ameliorating the poverty, deprivation, and suffering that will surely follow the scabrous policies of Mr. Trump. Each day is a new attack on our political and social norms; neofascist laws appear like a new head regenerated on a hydra. The courts may strike one down and another one is hatched immediately by the Trump cult.
This is addressed in a quote from Mexican poet Homero Aridjis in 1991: “There are centuries in which nothing happens and years in which centuries pass.”
We will certainly find out soon enough. We must ask ourselves are we Americans willing to take the risk; as Victor Hugo stated in an essay in 1845: “You have enemies, Good. That means you’ve stood up for something, sometime in your life.”
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Economist Says Fed Warning Shows Trump Driving US Economy 'Toward Disaster'
"Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families."
Mar 19, 2025
A former Obama administration economic adviser said Wednesday that the Federal Reserve's forecast of increased unemployment, accelerating inflation, and slower growth driven by President Donald Trump's economic policies could portend a return of the "stagflation" that plagued the nation in the 1970s.
The Federal Open Markets Committee, which sets U.S. monetary policy, downgraded its economic outlook for 2025 from an initial projection of 2.1% growth to 1.7%. FOMC also revised its inflation forecast upward from 2.5% to 2.8%.
While FOMC said that "recent indicators suggest that economic activity has continued to expand at a solid pace," the committee noted that "uncertainty around the economic outlook has increased."
Fears of an economic slowdown or even a recession have increased dramatically since Trump took office and imposed tariffs on some of the nation's biggest trade partners while moving to gut critical social programs in order to fund a $4.5 trillion tax cut that will overwhelmingly benefit wealthy Americans.
"Inflation has started to move up now. We think partly in response to tariffs and there may be a delay in further progress over the course of this year," Federal Reserve Chair Jerome Powell said during a Wednesday news conference, at which he said interest rates will remain unchanged. "The survey data [of] both household and businesses show significant large rising uncertainty and significant concerns about downside risks."
The economic justice group Groundwork Collaborative said the FOMC projections show that "Trump is steering our economy toward disaster," while warning of the possible return of stagflation, a combination of low or negative economic growth and inflation.
Alex Jacquez, the chief of policy and advocacy at the Groundwork Collaborative and a former adviser at the White House National Economic Council during the Obama administration, said in a statement that "the Federal Reserve's projections confirm what millions of Americans are already thinking: President Trump is steering our economy toward disaster."
"Voters elected President Trump to lower the cost of living, and instead, they continue to be saddled with persistently high inflation and interest rates," Jacquez continued. "Launching chaotic trade wars with our allies and gutting Social Security, Medicaid, and other vital programs in order to fund tax breaks for his billionaire donors isn't making life more affordable for working-class families. It is, however, a perfect recipe for stagflation."
Trump's economic policies—which some observers believe could be designed to deliberately tank the economy so that the ultrawealthy can buy up assets at deep discounts—have sent consumer confidence plummeting. Meanwhile, recent polls have revealed that a majority of voters disapprove of Trump's handling of the economy and inflation.
The latest FOMC forecast came as the world braces for yet another escalation of Trump's trade war, with the president threatening to implement worldwide reciprocal tariffs starting April 2.
The Organization for Economic Cooperation and Development (OECD) said Monday that Trump's trade war is likely to slow economic growth in the United States and around the world.
"The global economy has shown some real resilience, with growth remaining steady and inflation moving downwards," OECD Secretary-General Mathias Cormann said. "However, some signs of weakness have emerged, driven by heightened policy uncertainty."
"Increasing trade restrictions will contribute to higher costs both for production and consumption," Cormann added. "It remains essential to ensure a well-functioning, rules-based international trading system and to keep markets open."
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