The US economy shows many signs of weakness.

VTV.vn - The US economy shows signs of weakness as the Fed continuously lowers interest rates, pumps money to support banks, and production and consumption slow down.

US production and consumption both slow down

After cutting interest rates for the second time in a row last week, the US Federal Reserve (Fed) continued to inject $29.4 billion into the banking system. Although this is good news for investors, these actions also raise concerns about a weakening US economy . These concerns are growing as in the past few days, many major newspapers have continuously pointed out signs of weakness in the US economy.

The Fed’s recent liquidity injection is considered the largest in a single day in more than 5 years. According to analysis by some newspapers, this is a sign that market liquidity has tightened and the banking system is running out of cash.

The Associated Press has an article titled “Regional Bank Bad Debts Worry Wall Street” that mentions Fed data showing that several weeks ago, many US commercial banks used the “repo” mechanism, meaning overnight repurchase agreements from the central bank, for the second consecutive night – a move these banks have not had to do since the pandemic.

The mechanism has allowed banks to convert highly liquid securities into cash to cover short-term cash shortages.

View of Long Beach cargo port in California (USA). (Photo: THX/TTXVN)

Reuters mentioned the difficulties of consumers in the article: "The US economy is at risk of faltering as consumer incomes are tightened."

The newspaper said the resilience of American consumers, which underpins the economy, could be tested in the coming weeks. Household budgets, especially those in low-income groups, are under pressure from rising health care costs, the risk of losing federal food subsidies, and a weak labor market that is eroding incomes.

Besides the risks to the financial and consumer markets, in the manufacturing sector, newly released figures also show a continuous decline.

Market Watch cited data from the Institute for Supply Management survey, showing that the manufacturing index (PMI) fell to 48.7% in October, from 49.1% in September. This index is below 50%, which is usually a sign of recession. In addition, the survey also showed that US manufacturing has declined for the eighth consecutive month and shows no signs of stopping.

Also discussing this issue, Bloomberg said: The Institute for Supply Management survey showed a generally gloomy sentiment among the US manufacturing business community, as they are facing prolonged uncertainty related to trade policy. Manufacturers have to manage the changing supply chain to source materials. The supplier delivery index rose to a four-month high, indicating that delivery times have lengthened.

Another concern is that the current prolonged US government shutdown is disrupting the release of many official economic data, slowing the response of some economic management agencies.

Inflation is on track to exceed target in the third quarter of 2025

The US Treasury Department said on November 3 that inflation “remained above the 2% target in the third quarter,” even as President Donald Trump and administration officials continued to insist that “there is no inflation.”

Speaking on CBS News' "60 Minutes" on November 2, President Trump declared that he had "solved" the inflation problem and called 2% the "perfect inflation rate."

However, according to the US Bureau of Labor Statistics, inflation in September reached 3% compared to the same period last year.

The Treasury Department said in its new "Economic Statement" that "food prices for both groceries (food at home) and food services (food to go) increased moderately in the third quarter.

The statement, released on November 3, was a regular economic update prepared for the Treasury Department's Debt Advisory Committee, which includes nonpartisan bond market executives from firms such as Citigroup, Pimco, JPMorgan and BlackRock and is tasked with advising the Treasury on debt and fiscal issues.

Overall, the Finance Ministry said “economic growth consolidated in the third quarter with stable business investment and solid consumer demand”.

One of the main reasons for the rise in food prices is record beef prices, partly due to declining cattle herds.

Retail and food executives say that while consumer spending remains strong overall, lower-income consumers are having a much harder time than the middle and wealthy classes.

The median worker's wages have risen only slightly above inflation. As of August, the median wage rose 4.1%, while inflation was running at a 3.0% annual rate. Inflation has risen every month since April, when it was just 2.3%.

Regarding the labor market – which many economists and analysts say is weakening rapidly – ​​the Treasury Department said the job market remains “relatively stable,” although “monthly job growth slowed slightly, while the average unemployment rate increased only slightly.”

“The pace of job growth is now about 100,000 jobs lower than average per month in the first quarter of 2025,” the Treasury Department said, adding that the slowdown “likely reflects a slowdown in population growth related to the forced and voluntary deportations of illegal immigrants.”

People shop at a store in New York, USA. (Photo: THX/TTXVN)

“While job growth slows in the second and third quarters of 2025, the data do not suggest that this slowdown is due to weak GDP growth or a decline in overall demand,” the report added.

Gross domestic product (GDP) – the main measure of national economic output – grew 3.8% in the second quarter. Third-quarter GDP data was scheduled to be released on October 30, but was delayed due to the government shutdown.

There has also been no official jobs report since September for the same reason. Private payroll processor ADP reported on October 1 that private businesses cut 32,000 jobs in September. The delayed October jobs report could show another drop.

The Treasury Department said that “even excluding the government shutdown, the decline in public sector hiring could create a drag on the labor market in the fourth quarter of 2025.”

The department also noted that “the October jobs report may show a decline in total payroll employment” due to many federal employees choosing to delay filing severance pay earlier this year.

Artificial intelligence (AI) could also be a factor influencing changes in the labor market. The Ministry of Finance believes that AI can cause disruptive effects on the economy and the labor market, as businesses and individuals are in the process of integrating or failing to adapt to this technology. Companies that are slow to adapt to the technology could put themselves at a competitive disadvantage.

The new Economic Statement concluded that looking ahead to the next several quarters, the US economic outlook faces “risks both to the upside and downside.” The Treasury Department said it would “closely monitor developments in the private sector labor market” and asserted that the administration would pursue “supply-side policies, deregulation, and other reforms” to “protect American consumers.”

Source: https://vtv.vn/kinh-te-my-xuat-hien-nhieu-dau-hieu-suy-yeu-100251105112725165.htm