Trump's job market resilient, but consumer confidence lags

Wage growth has been on a steady decline since its peak in the first half of the Biden administration, failing to keep pace with inflation exacerbated by surging fuel and energy costs, as well as Trump's tariff policies. Consequently, households are saving less, and credit card delinquency rates are on the rise. The Conference Board reported that the number of consumers finding it hard to secure a new job has reached its highest point since before the widespread availability of COVID-19 vaccines. Furthermore, the rate at which individuals are quitting their jobs, often seen as a proxy for confidence in the labor market, has fallen to its lowest level since mid-2020.

However, signs of moderating job growth could potentially benefit Trump by easing pressure on the Federal Reserve to increase interest rates. Central bankers have been monitoring the strong labor market for indications that it might fuel consumer spending and further inflation, even as the impact of higher oil prices begins to wane. Kay Haigh of Goldman Sachs Asset Management noted that while the Fed might hold rates steady for the remainder of the year, any further upward surprises in inflation could prompt an earlier rate hike.