Trump Says U.S. Poised For Economic Boom. The Numbers Tell a Different Story.

President Donald Trump addressed the country Wednesday night, crediting his policies for making the nation “stronger than ever before.” (Getty Images)

President Donald Trump addressed the nation on Wednesday night, extolling his economic record to date and promising a bright economic future for the U.S. in the year ahead. But the economic data don’t paint a rosy picture.

“We are making America great again tonight,” Trump said in a roughly 20-minute address. “Our border is secure. Inflation has stopped. Wages are up. Prices are down. Our nation is strong. America is respected, and our country is back stronger than ever before. We’re poised for an economic boom the likes of which the world has never seen.”

Next year looks to be a make-or-break year for Trump’s economic promises. But it may be difficult for the U.S. economy to achieve the success he has forecast, given currently elevated inflation, rising unemployment, and concerns about the labor market outlook.

The Bureau of Labor Statistics reported on Tuesday that the unemployment rate rose to 4.6% in November, up from 4.2% a year ago. Payroll growth has also slowed substantially in the past year, with employers adding 64,000 jobs in November. That compares with 261,000 jobs added in November 2024.

Trump said Wednesday that there are more people working today than at any time in American history, but that doesn’t account for the fact the population is also larger. The labor-force participation rate was 62.5% as of November, roughly the same rate as a year ago, and below the highest levels in modern history. The U.S. labor-force participation rate peaked in 2000 and has declined steadily since.

The pace of wage growth has also slowed in recent months. Private-sector workers’ average hourly earnings rose by 3.5% year over year in November, compared with the 4.2% pace of annual average wage growth a year ago.

Members of the military will soon see a boost to their take-home pay, however, in the form of a bonus payment. Trump said Wednesday night that his administration is sending members of the military a special Christmas bonus called the warrior dividend. Some 1.45 million military service members will receive a $1,776 check, the amount inspired by the year of the nation’s founding. “The checks are already on the way,” Trump said. “Nobody deserves it more than our military, and I say congratulations to everybody.”

Inflation remains one of the most worrisome issues for American households, as prices for many groceries and other goods have services have risen sharply since the onset of the Covid-19 pandemic. Trump said he is bringing prices down “very fast,” but government data show that U.S. inflation has been on the upswing since April.

While price growth has decelerated sharply since June 22, when it peaked at an annual rate of 9%, inflation measured 3% in September, based on the consumer price index. The Bureau of Labor Statistics is set to release November inflation data on Thursday morning, after a delay caused by this fall’s government shutdown.

“One year ago, our country was dead. We were absolutely dead. Our country was ready to fail. Totally failed,” Trump said Wednesday, blaming the Biden administration. “Now we’re the hottest country anywhere in the world.”

But the economic growth has cooled from just a few years ago. Growth in gross domestic product, adjusted for inflation, was 2.8% in 2024. Federal Reserve officials estimate that real GDP will grow by just 1.7% in 2025, according to the latest summary of economic projections released earlier in December. The Fed estimates that GDP could grow by 2.3% in 2026. That is higher than many economists’ forecasts, but lower than estimates for many countries in Europe and Asia.

The Trump administration is working to accelerate growth. Trump said Wednesday that he plans to announce his pick for the next chair of the Federal Reserve soon. Current Chair Jerome Powell’s term ends in May. Trump promised that the next chair will be “someone who believes in lower interest rates by a lot, and mortgage payments will be coming down even further early in the new year.”

Trump also said he would announce “some of the most aggressive housing reform plans in American history” next year. Housing affordability has weighed heavily on many American families. The median age of a first-time home buyer hit 40 this year, according to the National Association of Realtors.

Trump hailed his restrictive immigration policies in his speech, saying they have helped reduce rent prices, free up jobs for native-born Americans, and lower healthcare expenses. Illegal border crossings have fallen dramatically under the Trump administration and arrests of undocumented residents are on the rise, but there is a more tenuous connection between employment and rent levels.

“We’re putting America first, and we are making America great again,” Trump said.

The Republican party’s success in the midterm elections and thereafter may depend on how great economic conditions get next year.

Write to Megan Leonhardt at megan.leonhardt@barrons.com