Golden Age Claims Ring Hollow as US Economic Pressures Mount

President Donald Trump recently declared that the United States is entering a golden age, lauding falling prices and robust economic performance in a speech to McDonalds franchise owners and suppliers. He commended the fast food giant for reintroducing discounted meal deals, positioning these moves as evidence of a more affordable cost of living. However, these headline reductions provide only surface reassurance, obscuring the reality of mounting financial strain for American households.

The leadership at McDonalds and Chipotle has raised alarms regarding shrinking consumer spending power. Chris Kempczinski, Chief Executive of McDonalds, remarked that middle and lower income consumers now face significant pressure, with many forced to forgo meals such as breakfast. Chipotle’s Scott Boatwright reported that households earning under 100,000 dollars per year are noticeably reducing their expenditure, further underlining widespread economic stress at the lower end of the income spectrum.

Despite the surge in technology shares driven by optimism over artificial intelligence, several warning signs remain evident in the broader economy. Layoffs have increased sharply, with over a million workers losing their jobs in the first ten months of the year, reflecting a 65 percent rise compared to 2024. In October alone, job losses stood at 153,000, marking the highest level for that month since 2003. Major employers such as Amazon, UPS and Target have all reduced their workforces significantly. The federal unemployment rate has crept upward to 4.4 percent, indicating a persistent softness in the labour market.

Financial distress is becoming difficult to ignore as defaults on student and car loans continue to rise. Student loan delinquencies reached a record 14.26 percent between July and September, and severe delinquencies in subprime auto lending have soared to heights not observed since at least 1993. These trends suggest that job losses could rapidly translate into deeper consumer debt problems, particularly among vulnerable groups.

Recent labour figures indicated that 119,000 jobs were created in September, exceeding expectations. However, earlier months saw downward revisions, raising questions over the durability of recent employment gains. Analysts from Goldman Sachs and Fitch Ratings have cautioned that employment data remain a leading indicator of economic health; bad jobs numbers are often the earliest warnings of a downturn in the United States’ flexible labour market.

Amid these pressures, Britain’s Barclays bank maintains a fifty percent probability of a US recession by 2027, acknowledging that limited new data may understate or overstate these risks. Analysts highlight that the Trump administration’s immigration crackdown has reduced the number of new entrants to the workforce, potentially explaining some of the recent slowdown in job growth. At the same time, economic activity remains highly concentrated, with surges in investment linked to artificial intelligence and continued spending by wealthy households buoyed by stock market gains.

While large portions of the economy exhibit significant weakness—seen in declining real residential and non-residential investment as well as faltering government expenditure—the ongoing boom in technology stocks conceals a more fragile reality. Economists warn that if the equity market loses momentum, the impact on real economic activity could be swift and severe, exposing the narrow foundations of recent growth.