The US economy after one year of President Trump's administration

 US GDP growth in the fourth quarter of 2025 is projected at only 1.4%, a sharp decrease from 4.4% in the third quarter and 3.8% in the second quarter, significantly lower than analysts' expectations (2.5-2.8%).

Thus, the US GDP growth for the whole year reached 2.2%, lower than the 2.8% growth rate of 2024 (the final year of former President Joe Biden's term). Previously, US Treasury Secretary Scott Bessent had expressed confidence in US economic growth, suggesting that the growth rate for the whole year of 2025 could reach 3%.

According to the U.S. Bureau of Economic Analysis (BEA), the federal government shutdown, which lasted more than a month (October 1 - November 12, 2025), was the main factor dragging down growth. Federal government spending fell at a rate of 16.6% in the fourth quarter, with disruptions to public services contributing approximately one percentage point to the fourth-quarter GDP growth. However, the BEA stated that the full impact of the government shutdown "cannot be precisely quantified."

In addition, consumer spending slowed down. The real consumer price index (CPI) only increased by 2.4% in the fourth quarter. Inflation showed signs of rising, with the personal consumption expenditure (PCE) index increasing by 2.9% in December, compared to 2.8% previously. The labor market continues to be a concern, although the unemployment rate remains low.

New job figures have stalled in 2025 as businesses grapple with uncertainty over tariffs and immigration policies, as well as the impact of automation and artificial intelligence (AI) on labor demand.

Analysts predict the US economy could grow by around 2.2% in 2026 thanks to continued investment in artificial intelligence, tax cuts, and a weaker dollar supporting exports.

Ahead of President Trump's 2026 State of the Union address, which will focus on the economy, the Wall Street Journal has compiled a list of some of the economic achievements of the Trump administration.

On the positive side

-- The US stock market is expected to continue rising in 2025, except for the period immediately following the US administration's imposition of retaliatory tariffs. The S&P 500 index rose nearly a third as speculators increased their purchases of AI-related stocks, and the Dow Jones Industrial Average reached a record high of 50,000 points; this is the driving force behind US growth and consumption in 2025.

- Wages are rising faster than expected, with real wages adjusted for inflation rising by approximately 1.1-1.2% in 2025. However, income inequality remains a concern, with the US economy experiencing K-shaped growth in which lower-income groups are most affected.

- The unemployment rate fluctuates between 4.3% and 4.5%, a relatively low level, but this is primarily due to stricter immigration policies rather than the health of the labor market. According to Goldman Sachs, net immigration reached 500,000 people, down from 1 million in the 2010s, meaning the economy only needs to create fewer jobs to keep the unemployment rate low. On the other hand, new jobs created showed a slight increase in January 2026, but this was concentrated in sectors such as healthcare and social services, a sign of the aging US population.

Meets expectations but needs improvement.

Inflation remained at 2.4%, lower than the 3% level of January 2025 when President Trump returned to power, but this does not mean that tariffs have not impacted people's lives. According to research by the New York Fed, nearly 90% of tariffs are passed on to American businesses and individuals. The sharp increase in prices of essential goods (coffee up 18%, beef up 17%, electricity up over 6%) weighs heavily on consumers, while gasoline (-7.5%) is one of the few items that have decreased in price.

Therefore, Americans still have the feeling that the cost of living is rising.

Housing remains a burden for consumers. An average American household spends 42% of their monthly income on mortgage payments, interest, property taxes, and insurance, compared to 44% at the beginning of 2025.

Not meeting expectations

Economic growth in 2025 is projected at just 2.2%, lower than the 2.4% of 2024 and the lowest level since 2022. This growth figure is a far cry from President Trump's promise of a golden age for the American economy.

The trade deficit continues to widen. Promises to reduce the trade deficit have not been fulfilled, with the US continuing to import $1.24 billion, compared to $1.21 billion in 2024. Tariffs only serve to adjust supply chains; US businesses are increasing imports from India instead of China, and the AI ​​boom has also led to a sharp increase in chip imports from Taiwan (China).

Bring manufacturing back to the US. The manufacturing index has fallen for eight consecutive months since April 2025; tariffs help protect some domestic businesses but also drive up production costs in a context where supply chains are now heavily globalized, with much machinery and raw materials imported from abroad.

Source: VTV