The Collapse of the "Trump Economy"

Trump's economy isn't putting Americans to work. It's convincing them to give up the search.

America's doing great! The economy has never been better. Prices are coming down. Manufacturing is roaring back. It's a new Golden Age! And 2026 is shaping up to be a blockbuster year!!

None of that is true.

But it's the story Trump and his lackeys are still trying to sell to the American people.

Team Trump's spin attempts became increasingly laughable on Friday 7 August, following a disastrous report which showed the U.S. lost 23,000 jobs in July (vs. an expected gain of 87,000).

Kevin Hassett, Director of the National Economic Council, actually told Fox News viewers that, if you ignored the massive jobs losses in some sectors of the economy, "you actually had a number that was plus 100,000."

"A bleak jobs report... Many industries shedding jobs"

The reality was summed up by economist Heather Long on X, in a post that began with the words, "This is a bleak July jobs report..."

Long flagged these key points:

-23,000 jobs lost in July. (Losses occurred in retail, finance, hospitality, local gov't education)
-264,000 people leave the labor force
-Wage growth falls to 3.2% = lowest in 5 years (and totally wiped out by inflation right now)
***Lowest labor force participation rate since February 2021***

Meanwhile, economist Justin Wolfers noted that the headline numbers don't fully capture the extent of the Trump jobs collapse:

This month came in roughly 100,000 below expectations, and the prior two months in total were revised down by another 100,000. Put it all together and that’s about 200,000 fewer jobs than we’d hoped.

With the new revisions, average job growth over the past three months is just 20,000 jobs per month.

And the decline in the unemployment rate (from 4.2% to 4.1%) is created by a factor Long noted on X, but which the headlines don't properly explain: Another 264,000 people dropped out of the workforce in July, on top of the 720,000 people who did so in June.

That's nearly a million people — mostly of prime working age — who aren't leaving the job market by choice, but because the search has become hopeless.

While Trump can still make the claim that more people are working in America than at any time in history, that's driven by population, not policy. The actual labor participation rate has plunged in ways that will create a shrinking tax base, slower economic growth, and heavier pressure on government budgets, even as the Trump administration is, in the words of Heather Cox Richardson, "spending money like absolute water."

Where are the jobs? In "Nasty Canada"

As Wolfers also noted today, "Canada is creating jobs at a rate that is roughly 4x that in the United States."

Naturally, Trump is distracting from his own economic incompetence (and the collapse in his approval ratings) by lashing out at our northern neighbor. In a speech in Las Vegas this week, he said: "Canada’s nasty. They are, they’re nasty. I love the people, but they’re nasty, nasty leadership."

Turns out Canadians are OK with "nasty." Recent opinion polls show that Canadian prime minister Mark Carney is still riding high with voters.

One reason for Carney's 66% approval rating: Job creation has accelerated in Canada over the past three months, even as U.S. jobs have evaporated.

The nasty truth is what's happening in America: Trump's economy isn't putting Americans to work. It's convincing them to give up the search.

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Previous articles:

July 2026: The Trump Jobs Mirage

May 2026: Trump Screws Workers

January 2026: Trump Isn't Working

November 2025: The Trump Jobs Catastrophe

September 2025: How Trump Broke the Economy

August 2025: Trump Jobs Disaster

June 2025: The Trump Jobs Crisis

February 2025: The Next Trump Crash