Is it working economically ?

The US economy is facing significant challenges, indicating that it is not working as smoothly as desired. Real GDP growth is forecasted to be modest, with estimates of 2.6% in 2025 and 2.1% in 2026, and averaging 1.9% per year over the following three years. Consumer spending growth is expected to slow down to 2.2% in 2025 from 2.8% in 2024. The implementation of tariffs is anticipated to cause sizable shocks to growth, inflation, and employment, although the economy is expected to avoid a recession due to solid economic fundamentals. Unemployment is projected to rise to 4.5% by June 2025, and job growth is expected to decelerate significantly. Inflation remains a concern, with headline CPI inflation expected to average 2.8% in Q4 2025 and 2.4% in Q4 2026. The Federal Reserve is likely to maintain high interest rates and may only manage modest rate cuts later in the year, reflecting the ongoing economic uncertainty and policy volatility.