The Journal: What's Going On With the Economy? Released: March 12, 2025 | Host: Jessica Mendoza, Ashby Jones, Scott Bessant | Co-Produced by Spotify and The Wall Street Journal

Introduction

In the March 12, 2025 episode of The Journal, hosts Jessica Mendoza, Ashby Jones, and Scott Bessant delve into the tumultuous economic landscape shaped by President Donald Trump's recent policies. As Trump embarks on his second term, the administration's aggressive economic strategies are stirring significant debate and uncertainty among economists, business leaders, and consumers alike.

Shift in Economic Messaging

The episode opens with a surprising statement from President Trump on Fox News ([00:05] Jessica Mendoza), where he did not rule out the possibility of a recession. This marks a notable shift from his previous rhetoric promising a "sweeping transformation of the American economy" aimed at making the nation "affordable again."

Scott Bessant elaborates on the administration's transition period, stating, “There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing. And there are always periods of it takes a little time” ([00:13]).

Implementation of Tariffs and Economic Impact

A significant focus of the episode is the administration's imposition of new tariffs. Trump announced a 25% tariff on imports from Canada and Mexico, with additional tariffs on China ([04:32] Jessica Mendoza). However, the execution has been inconsistent:

• Initial Pause and Reinstatement: The tariffs were initially paused for a month ([05:04] Scott Bessant) but went into effect for only two days before being temporarily exempted for automakers and paused again ([05:16] Jessica Mendoza).
• Impact on Markets: The inconsistency has injected “a lot of uncertainty” into the economy. Ashby Jones notes, “We're starting to see some sort of slippage in the economy” ([05:26]).

Economic Indicators:

• Consumer Confidence: Down nearly 10% from the previous month ([01:10] Scott Bessant).
• Stock Market: The Dow plunged nearly 750 points ([01:14] Ashby Jones), with the S&P 500 and Nasdaq also falling sharply.
• Inflation Concerns: Although inflation remained at 2.8% in February ([07:19] Ashby Jones), economists worry that tariffs could trigger future inflation by driving up prices and increasing costs for American companies reliant on imports.

Government Spending Cuts and Labor Market

Trump's administration is aggressively cutting federal government spending, leading to massive layoffs within the government workforce ([04:32] Jessica Mendoza). Ashby Jones warns of potential ripple effects:

• “It could, over time, sort of blip up unemployment if the people who are getting laid off don't have jobs lined up” ([08:09] Ashby Jones).
• Early signs show decreased consumer spending, with major airlines predicting lower revenues and Kohl’s reporting reduced household goods purchases ([08:47] Jessica Mendoza).

Business Reactions and Uncertainty

The administration's unpredictable approach to tariffs has led to pushback from business leaders. During a meeting with tech CEOs from Qualcomm, HP, and others, executives expressed concerns that the tariffs would harm the tech sector, particularly those reliant on Chinese manufacturing ([14:16] Scott Bessant).

Scott Bessant remarks on the administration's challenges: “What economists talk about is, you know, tariffs are going to be inflationary. They're going to drive up prices” ([07:37] Jessica Mendoza).

Lack of Counterbalance in the Administration

A critical issue highlighted is the absence of a unified advisory team within the White House. Scott Bessant points out, “no one is really saying no to the president” ([16:30]), which leads to what he describes as a “scattershot economic policy way of doing business” ([15:36]).

Future Outlook and Consumer Sentiment

Ashby Jones emphasizes the importance of monitoring consumer confidence and spending as leading indicators of economic health. He notes, “If stock markets start to drop, people get a little bit worried about their own pocketbooks… that can then lead to recessionary forces or pressures” ([18:23]).

Conclusion

The episode concludes with a consensus that the current economic policies under Trump's administration are fostering significant uncertainty. Without a counterbalancing advisory voice, the administration's aggressive tariff policies and government spending cuts may continue to inject volatility into the economy. Hosts urge listeners to stay vigilant, as the coming weeks will be crucial in determining whether these policies will lead to long-term economic benefits or exacerbate recessionary pressures.

Notable Quotes:

• Scott Bessant ([00:13]): “There is a period of transition because what we're doing is very big. We're bringing wealth back to America. That's a big thing.”
• Ashby Jones ([05:26]): “We're starting to see some sort of slippage in the economy.”
• Scott Bessant ([07:37]): “Tariffs are going to be inflationary. They're going to drive up prices.”
• Scott Bessant ([15:36]): “It is in part kind of a scattershot economic policy way of doing business.”

Key Takeaways:

• The Trump administration's tariff policies are causing significant market volatility and uncertainty.
• Consumer confidence and spending are declining, signaling potential economic slowdown.
• Lack of a unified advisory team is leading to inconsistent economic policies.
• Business leaders are concerned about the long-term impact of tariffs on sectors like technology.
• The economy is in a precarious transition period, with potential short-term pain in pursuit of long-term gains.

Additional reporting in this episode from Gavin Bade, Josh Dawsey, Justin Lehart, Paul Kiernan, Conrad Poitier, and David Oberti.