Nobel Prize-winning economist Joseph Stiglitz has a poor prognosis for the state of the economic system: “Not great right now,” he stated on CNBC’s “Squawk Pod” on Thursday. “And the prospects are that it’s going to get worse.”
In a criticism of President Donald Trump’s financial insurance policies, Stiglitz stated one of many best threats to the precarious well being of the U.S. economic system was slumping blue-collar jobs, together with a shortage of producing roles.
“Do you know what happened to jobs in manufacturing in the last year? They’re down,” he stated. “[Trump] didn’t succeed over the last year in bringing back manufacturing jobs.”
A Joint Financial Committee evaluation printed earlier this month revealed 108,000 fewer manufacturing jobs final 12 months, almost double the estimation from Bureau of Labor Statistics information in November, which discovered 59,000 fewer jobs. Jobs information from February 2025 to final month reveals a 166,000 complete loss in blue-collar jobs, which additionally contains development, mining, and warehousing. Stiglitz alluded to tariffs being a cause behind the collapse.
“The decline in blue-collar jobs is even larger,” he continued. “And you look at, where is the increase in jobs in the United States—health care. Does that have anything to do with the tariffs? No.”
(Stiglitz famous the expansion of the well being care sector is because of extra folks rising older and is much less depending on broader macroeconomic developments).
The White Home claimed early in Trump’s second time period manufacturing had come “roaring back” underneath his administration, with the president claiming his aggressive tariff technique could be a catalyst for American reshoring of producing jobs by disincentivizing international manufacturing. These efforts at the moment are in jeopardy.
The Supreme Court docket dominated on Friday the Trump administration can not impose tariffs underneath the Worldwide Emergency Financial Powers Act (IEEPA), establishing $175 billion in estimated tariff income to probably be refunded to corporations hit by the taxes and elevating questions on the way forward for Trump’s tariff coverage.
White Home spokesperson Kush Desai stated trillions of {dollars} in investments are fuelling American manufacturing, mirrored in a surge in specialty commerce development jobs.
“With both productivity and real wages for manufacturing workers surging, the best is yet to come as the President’s policies continue taking effect,” Desai stated in an announcement to Fortune.
The irony of Trump’s tariffs
Economists have warned Trump’s tariffs haven’t solely backfired as American households and firms foot the invoice for the import taxes, however the levies have additionally partly brought on the manufacturing hunch it was meant to repair.
“It is striking how soft manufacturing has been because, in theory, you put tariffs in place to protect domestic manufacturing, so that domestic manufacturing employment grows,” Laura Ullrich, director of financial analysis on the Certainly Hiring Lab, advised Fortune in November. “And we have seen the opposite of that.”
Ullrich stated the financial uncertainty tariffs have introduced has disincentivized corporations from hiring. A September 2025 observe from Pantheon Macroeconomics analysts Samuel Tombs and Oliver Allen posited that shrinking wage development within the U.S. was a results of corporations with excessive tariff publicity attempting to protect slim margins by reducing labor prices.
“Oftentimes when there is heightened uncertainty, it’s just difficult for businesses and people to make decisions in real time,” Ullrich stated. “And so that slows down employment. It slows down all those processes.”
Manufacturing jobs could also be uniquely weak to tariffs on account of heavy taxes on intermediate items, together with uncooked supplies like metal and aluminum which can be key in producing completed items. Tariffs on these items can elevate enter prices, additional pressuring manufacturing corporations. When President George Bush applied metal tariffs throughout his second time period in 2002, metal manufacturing unemployment was depressed, even years after the tariffs have been eliminated, a research printed in November 2025 within the American Financial Journal: Financial Coverage discovered.
“When you tax the intermediate goods, that’s going to manufacturers directly,” Ullrich stated. “That’s part of what we’re seeing.”
