Americans' view of the economy is bad and getting worse A new Fed survey shows fears about unemployment hit their highest levels since the COVID-19 pandemic
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A recent survey conducted by the Federal Reserve sheds light on evolving consumer expectations regarding inflation and unemployment, offering valuable insights into how Americans perceive the current economic climate. The findings indicate that while inflation remains a top concern, perceptions about job security and employment prospects are also influencing consumer sentiment.
The survey revealed that many households anticipate inflation to persist at elevated levels in the near term. However, expectations for long-term inflation appear more moderate, suggesting that consumers believe price pressures may ease over time. This divergence between short- and long-term outlooks underscores the complexity of navigating economic uncertainty, as individuals weigh immediate challenges against hopes for future stability.
At the same time, attitudes toward the labor market remain mixed. While unemployment rates have remained relatively low, concerns about job availability and wage growth continue to shape consumer confidence. Some respondents expressed optimism about their employment prospects, citing strong demand in certain industries. Others, however, voiced worries about potential layoffs or reduced hours, highlighting lingering anxieties amid broader economic shifts.
The Federal Reserve's analysis emphasizes the interconnected nature of these issues. Rising prices and fluctuating job markets are not just abstract economic indicators but tangible factors affecting household budgets and financial planning. For policymakers, understanding these nuances is critical to crafting measures that address both inflationary pressures and labor market dynamics.
As the Fed continues to monitor these trends, the survey serves as a reminder of the delicate balance required to manage economic expectations. By keeping a pulse on consumer sentiment, officials hope to implement strategies that foster stability and reassure the public during periods of uncertainty.
In sum, the survey paints a nuanced picture of American households' economic outlook—one marked by cautious optimism about the future but tempered by ongoing concerns about inflation and employment. These findings will likely inform the Fed's approach as it seeks to guide the economy toward sustained growth and resilience.
More than a dozen major unions filed a lawsuit on Monday seeking to block the administration of President Donald Trump from shutting down a federal agency that mediates labor disputes in the public and private sectors.
The unions in a complaint, opens new tab filed in Manhattan federal court said that efforts to dismantle the Federal Mediation and Conciliation Service violate Congress' constitutional powers to create or dissolve federal agencies.
Since then, more than 90% of the mediation service's employees have been placed on administrative leave and the agency has closed all of its field offices, leaving a skeleton staff in Washington, the unions said in the lawsuit.
"Without the services of FMCS, Plaintiffs are left in the lurch, often working under expired contracts or no contracts, and strikes or lockouts are much more likely," they said.
The White House and the FMCS did not immediately respond to requests for comment. In a statement, opens new tab last month, the agency said it was "still operational and performing our statutory functions of collective bargaining mediation work in the private and federal sectors."
The plaintiffs include the American Federation of Government Employees, which represents more than 800,000 federal workers, the American Federation of Teachers and the AFL-CIO.
The mediation service was created in 1947 and primarily works to broker settlements in collective bargaining disputes through mediation and arbitration.
Private-sector employers must notify the agency if they intend to terminate or modify a union contract, and the FMCS then decides whether to intervene and offer mediation services. The agency is required to intervene in cases involving potential work stoppages in healthcare settings and the U.S. Postal Service.
In the federal sector, the use of the agency's services is voluntary and labor disputes more often go to a different agency, the Federal Labor Relations Authority. Trump in March fired a Democratic member of that agency, but she was reinstated by a federal judge.
The FMCS receives roughly 15,000 notices from employers each year and in 2024 supplied about 10,000 arbitrator panels and appointed more than 4,000 arbitrators to hear cases, according to the lawsuit filed on Monday.
The unions claim that Trump had no power to order that the agency be effectively shuttered, and that doing so defied the power of Congress to create agencies, charge them with specific functions and provide funding to carry out their missions.
The lawsuit seeks preliminary and permanent injunctions barring the FMCS from implementing Trump's executive order and requiring the agency to reinstate employees and resume mediation services.
The case is American Federation of Teachers v. Goldstein, U.S. District Court for the Southern District of New York, No. 1:25-cv-3072.
For the unions: Elisabeth Oppenheimer and Cole Hanzlicek of Bredhoff & Kaiser
For the government: Not yet available
Ray Dalio, the billionaire hedge fund manager of Bridgewater Associates, said over the weekend that he’s worried about “something worse than a recession” because of President Donald Trump’s trade war.
“I think that, right now, we are at a decision-making point and very close to a recession,” Dalio said on “Meet the Press” when asked if the U.S. was headed toward a recession because of the president’s tariff policies. “And I’m worried about something worse than a recession if this isn’t handled well.”
Dalio’s comments come in response to weeks of tumult in the global markets because of Trump’s ever-changing policies.
The Bridgewater founder likened the current economic climate to that of the 1930s, saying, “I’ve studied history. And this repeats over and over again.” He added that we currently “have a breakdown of the monetary order.” He said the current mix of tariffs, high debt, and China (“a rising power challenging existing power,” the U.S.) is “very, very disruptive.”
“How that’s handled could produce something much worse than recession,” he said.
After Trump announced his 90-day pause on most tariffs, Dalio wrote on X (formerly Twitter) that negotiating with China would be a “win-win”— namely, a deal that appreciates the Yuan against the dollar that’s “achieved by the Chinese selling dollar assets, while also easing their fiscal and monetary policies to stimulate their demand.”
On “Meet the Press,” Dalio said, “We are having profound changes in our domestic order… and we’re having profound changes in the world order.”
Kristen Welker, who was moderating the panel on the NBC (CMCSA+1.99%) show, noted that Dalio predicted the 2008 recession and pressed him on what his comments about the current state of the country mean. He said the U.S. is “at a juncture.”
Dalio said the situation could be “managed very well” if members of Congress take what he calls the 3% pledge — that they will “in one way or another” reduce the budget deficit to 3% of the country’s gross domestic product (GDP).
“If they don’t, we’re going to have a supply-demand problem for debt at the same time as we have these other problems,” Dalio said. “And the results of that will be worse than a normal recession.”
He said the worst-case scenario here is “internal conflict that is not the normal democracy as we know it — an international conflict in a way that is highly disruptive to the world economy and could even be a military conflict.”
When asked by Welker what his biggest fear is in terms of a financial crisis, Dalio said he was worried about the value of money, adding, “We’re going to be in a situation where, if that storehold of wealth is in jeopardy because there’s too much supply and demand and so on and we have a monetary inflation. We will have great disruptions.”
“And that could be like the breakdown of the monetary systems of ’71. It could be like 2008. It’s going to be very severe,” Dalio said.
Trump administration research cuts prompt scientists to seek jobs in Europe
The European Research Council says it would double the relocation budget for funding researchers moving to the EU to 2 million euros ($2.16 million) per applicant.
David Die Dejean is passionate about studying tuna. Last year, he landed a dream job at the National Oceanic and Atmospheric Administration in Miami to pursue his research. By January, he was settled in, had received a good review, and loved working with his colleagues, he said.
Then, in mid-February, he received an email to vacate the premises within 90 minutes.
He and hundreds of others had been dismissed in job cuts targeting probationary workers as U.S. President Donald Trump’s new administration began slashing funding for universities and research bodies.
Now Die Dejean is applying for positions in Europe.
“I want to work wherever they allow me to do the research,” said the scientist, who studies fish stocks to ensure tuna is being fished sustainably.
“I’m eagerly waiting for some of the things that are coming from the European Union…increasing the opportunities for scientists like me to come back,” said Die Dejean, who was born in Spain but has spent most of his career in the U.S. and Australia.
Trump’s administration says billions of dollars in cuts are needed to curb the federal deficit and bring the U.S. debt under control.
His cutbacks on research come amid a broader clash that has seen Trump criticise universities as discriminatory for their diversity policies and denounce what he sees as a failure by some institutions to protect Jewish students from antisemitism.
The threat to academics’ livelihoods at universities including Yale, Columbia, and Johns Hopkins has given Europe’s political leaders hope they could reap an intellectual windfall.
A letter, reviewed by Reuters, signed in March by 13 European countries including France, Germany and Spain, urged the EU Commission to move fast to attract academic talent.
The European Research Council, an EU body that finances scientific work, told Reuters it would double the relocation budget for funding researchers moving to the EU to 2 million euros ($2.16 million) per applicant. That goes towards covering the cost of moving to a European institution, which may involve setting up a laboratory.
In Germany, as part of coalition talks for a new government, conservatives and Social Democrats have drawn up plans to lure up to 1,000 researchers, according to negotiation documents from March seen by Reuters that allude to the upheaval in U.S. higher learning.
Reuters spoke to 13 European universities and research institutes that reported seeing an increase in U.S-based employees considering crossing the Atlantic, as well as half a dozen U.S.-based academics pondering a move to Europe.
“Regulatory uncertainty, funding cuts, immigration restrictions, and diminished international collaboration create a perfect storm for brain drain,” said Gray McDowell at U.S. digital consultancy firm Capgemini Invent.
A White House official said the administration is analysing research grants and prioritizing funding for areas likely to deliver returns for taxpayers, “or some sort of meaningful scientific advancement”. The NOAA cuts were designed to avoid compromising its ability to do its duties, the official added.
European momentum
Pulling in U.S. talent to Europe requires more than goodwill, though. It requires money.
For decades, Europe has lagged far behind the U.S. on investment in its seats of higher learning.
Total expenditure on research and development in the EU among businesses, governments, universities, and private non-profit organizations in 2023 was 381 billion euros ($411 billion), according to the latest figures by Eurostat – the statistical office of the European Union.
That same year, total research and experimental development in the U.S. was estimated at $940 billion, according to the National Center for Science and Engineering Statistics, a federal agency that provides data on the performance of science and engineering in the U.S.
And while the U.S’s richest university, Harvard, has an endowment worth $53.2 billion, that of Britain’s wealthiest, Oxford, is only 8.3 billion pounds ($10.74 billion).
One academic and an expert in academia said, even with a concerted and substantial effort, Europe would likely need a long time to overturn that spending advantage.
“I don’t foresee a rapid build-up of additional scientific capability that could match what the U.S. now has…for several decades”, Michael Oppenheimer, a Professor of Geosciences and International Affairs at Princeton, told Reuters.
The White House official said even with the cuts, the U.S. would still account for the most global research funding, adding: “Europe is not going to and cannot fill the void.”
Dozens of scientists have taken to social media encouraging peers to stay in the U.S., while others acknowledge a number of drawbacks may deter them from moving.
Michael Olesen, director of an infection prevention program for a healthcare system in Washington, D.C., said language barriers were one potential drawback, as were unfamiliar laws and employment practices.
Salary is another.
“My impression is that I would get paid a lot less as an anaesthesiologist in Europe,” said Holden K. Groves, an Assistant Professor of Anaesthesiology at Columbia University, which received funding from the National Institutes of Health (NIH). “It’s a huge ordeal to change.”
“Huge opportunity”
Still, Europe’s political leaders feel the stance of the Trump administration has put the wind in their sails.
“The American government is currently using brute force against the universities in the USA, so that researchers from America are now contacting Europe,” Germany’s chancellor-in-waiting, Friedrich Merz, said last month.
“This is a huge opportunity for us.”
John Tuthill, an American neuroscience professor at the University of Washington in Seattle, is assessing his options. He cannot apply for new funding to plan beyond 2027 because grant applications have now been frozen.
The lab of 17 people he runs gets about three-quarters of its funding from the NIH, where the Trump administration has earmarked major cuts.
“Europe is the obvious one, because it is the other hub of biomedical research in the world,” said Tuthill, who is originally from Maine, adding he is weighing up a move with his wife and daughter.
Aix Marseille University in France told Reuters it had received interest from 120 researchers at institutions in the U.S., including NASA and Stanford, for a 15-million euro ‘safe space for science’ programme launched on March 7. The initiative aims to attract U.S. staff from fields including health, LGBT+ medicine, epidemiology, and climate change.
“Our colleagues were frightened…It was our duty to rise to the occasion,” university director Eric Berton said, noting 10 European universities have contacted him about launching similar programs.
In the Netherlands, the government wants to establish a fund to attract top foreign scientists and bolster the EU’s ‘strategic autonomy’ aims, Education Minister Eppo Bruins said in a letter to parliament on 20 March.
That marks a policy shift as the government had previously announced plans to cut half a billion euros in research and higher education.
Eindhoven Tech University President Robert-Jan Smits told Reuters that bringing in U.S. scientists could boost Europe’s technological sovereignty in areas like semiconductors.
The Grantham Institute at Imperial College London, which specialises in climate change research, is creating at least two more research fellowship posts for early-career climate researchers from the U.S. and has already seen a clear uptick in applications, said its Director of Research, Joeri Rogelj.
Sarah Weisberg, a fisheries biologist at the National Marine Fisheries Service, based in Woods Hole, Massachusetts, said she was fired in February’s probationary cuts and has since been offered a job in Europe.
“I had not ever considered taking [my career] to Europe,” she told Reuters. “Now, I kind of have no choice but to think that way.”
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Trump’s Economic Promises: Can Tariffs Really Boost Blue-Collar Jobs and Housing?
As Donald Trump gears up for another term, his economic agenda is taking shape, with a heavy focus on reviving blue-collar jobs and tackling the housing crisis. His signature proposal? Slapping hefty tariffs—potentially 10 to 20 percent on all imports, with even steeper ones on goods from China. The idea is to supercharge American manufacturing and construction by making foreign products pricier, encouraging companies to produce domestically. But will this plan deliver for workers and homebuyers, or is it a gamble with unintended consequences?
On the jobs front, Trump’s pitch is straightforward: tariffs will bring back factories, creating well-paying positions for welders, machinists, and other skilled tradespeople. Historically, his first-term tariffs on steel and aluminum did lead to some job gains in those sectors. Data from the Bureau of Labor Statistics shows manufacturing employment ticked up slightly from 2017 to 2020, though overall job growth was modest. The catch? Tariffs also raised costs for industries like auto manufacturing and construction, which rely on imported materials. This ripple effect could kneecap the very workers Trump aims to help, especially if companies pass higher costs onto consumers or cut jobs to offset losses.
Housing is another key piece of Trump’s blueprint. With home prices and mortgage rates squeezing buyers, he argues tariffs will spark a construction boom by boosting demand for American-made materials like lumber and steel. More domestic production, the thinking goes, means more jobs for carpenters and electricians, plus cheaper homes as supply ramps up. But skeptics point out a flaw: tariffs often inflate material costs. In 2018, Trump’s steel tariffs drove up prices by as much as 25 percent, according to industry reports, making homes pricier to build. If that happens again, developers might scale back projects, stalling construction and keeping housing out of reach for many.
The bigger picture isn’t rosy either. Economists warn that broad tariffs could ignite inflation, erode consumer purchasing power, and risk trade wars. Retaliation from countries like Canada or the EU could hit U.S. exporters hard—think farmers and tech firms. The Tax Foundation estimates a 10 percent universal tariff could shave 1.5 percent off GDP while barely denting the trade deficit. For blue-collar workers, any job gains might be offset by higher prices for everyday goods, from groceries to appliances.
Trump’s supporters counter that bold moves are worth the risk. They argue decades of free trade hollowed out industrial heartlands, and tariffs are a necessary corrective. Short-term pain, they say, could pave the way for long-term self-reliance. Critics, meanwhile, see a policy that sounds good on the campaign trail but falters under scrutiny.
The success of Trump’s plan hinges on execution. Targeted tariffs paired with incentives for domestic production could spark growth without too much collateral damage. But a sledgehammer approach—blanket tariffs with no clear strategy—might backfire, leaving workers and homebuyers worse off. As 2025 unfolds, the question isn’t just whether Trump can deliver, but at what cost.
