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Economy
More Signs of Distress in Trump Economy as Inflation, Jobless Claims Rise
"The middle-class squeeze from tariffs is here," observed one economist.
Sep 11, 2025
New economic data released on Thursday revealed fresh signs of stress for the US economy and working families.
A new Consumer Price Index report from the Bureau of Labor Statistics (BLS) found that overall inflation rose by 2.9% year-over-year in August, while core inflation—a measure that excludes commodities such as food and energy—rose 3.1%, the highest reading recorded since this past January.
Both of these numbers were in line with economists' consensus estimates, although they still showed inflation trending in the wrong direction during a time when the US labor market is also showing signs of weakness.
Looking deeper into the report reveals that the cost of groceries continues to be a major pain point for US consumers, as food prices jumped by 0.6% on the month and 2.7% year-over-year.
The report comes days after US President Donald Trump said in a radio interview, "We have no inflation. Prices are down on just about everything."
New York Times economics reporter Ben Casselman said that the spike in food prices was notable because it came after a long period in which food inflation had been coming down.
"Grocery prices are once again rising relatively rapidly," he observed in a social media post. "Food inflation had eased significantly, and had been running well below overall prices, but that's no longer true."
Heather Long, the chief economist at Navy Federal Credit Union, singled out some particularly important household staples in the report that she argued were very likely being impacted by President Donald Trump's tariffs.
Among other things, Long said that coffee was now 21% more expensive than it was a year ago, while living room and dining room furniture saw a 10% year-over-year increase, and the price of toilet paper rose by an annualized 5%.
"The middle-class squeeze from tariffs is here," she said. "Inflation hit 2.9% in August, the highest since January and up from 2.3% in April. It's troubling that so many basic necessities are rising in price again: Food, gas, clothing, and shelter all had big cost jumps in August. And this is only the beginning."
Mike Konczal, senior director of policy and research at the Economic Security Project and a former member of President Joe Biden's National Economic Council, said that the new report shows "inflation is broadening" given that the "percent of items that had at least a 3% annualized price increase over the last month" increased to nearly 60%, which is the highest percentage seen in years.
The inflation report was not the only troubling economic indicator, however.
The BLS also revealed that jobless claims in the US jumped to 263,000 last week, which was significantly higher than the 235,000 claims expected by economists. Joe Weisenthal, the co-host of the Bloomberg "Odd Lots" podcast, noted that this was the highest total for weekly jobless claims in nearly four years.
Long also flagged the worrying jobless claims number and predicted that it was just the start of a further downturn in the US economy.
"'Cost cutting' is back among CEOs and that is corporate speak for more layoffs," she said. "It's going to be a rough few months ahead as the tariffs impacts work their way through the economy. Americans will experience higher prices and (likely) more layoffs."
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Advocates Warn Against Ted Cruz's Industry-Friendly 'Sandbox' for AI
"The mantra in Silicon Valley is 'move fast and break things,' and that's exactly what Big Tech will do with a green light to override the laws and regulations they don't want to follow," one expert said.
Sep 10, 2025
US Senate Commerce Committee Chair Ted Cruz on Wednesday unveiled a legislative framework for artificial intelligence, including a bill to create a "regulatory sandbox," which the Texas Republican said is part of President Donald Trump's AI Action Plan.
The Strengthening Artificial intelligence Normalization and Diffusion By Oversight and eXperimentation (SANDBOX) Act "gives AI developers space to test and launch new AI technologies without being held back by outdated or inflexible federal rules," Cruz's office said in a statement.
While his office celebrated support for the bill from "notable organizations in the tech space like the Abundance Institute, U.S. Chamber of Commerce, and the Information Technology Council," the consumer watchdog group Public Citizen swiftly sounded the alarm over the industry-friendly proposal.
"Public safety should never be made optional, but that's exactly what the SANDBOX Act does," said Public Citizen Big Tech accountability advocate J.B. Branch. "Companies that build untested, unsafe AI tools could get hall passes from the very rules designed to protect the public. It guts basic consumer protections, lets companies skirt accountability, and treats Americans as test subjects."
"It's unconscionable to risk the American public's safety to enrich AI companies that are already collectively worth trillions."
"The mantra in Silicon Valley is 'move fast and break things,' and that's exactly what Big Tech will do with a green light to override the laws and regulations they don't want to follow," Branch warned. "AI corporate executives see the opportunity to deploy all sorts of unregulated and untested products that can threaten our children's safety, consumers' privacy, and American democracy."
"It's unconscionable to risk the American public's safety to enrich AI companies that are already collectively worth trillions," he added. "The sob stories of AI companies being 'held back' by regulation are simply not true, and the record company valuations show it. Lawmakers should stand with the public, not corporate lobbyists, and slam the brakes on this reckless proposal. Congress should focus on legislation that delivers real accountability, transparency, and consumer protection in the age of AI."
Brendan Steinhauser, CEO of the Alliance for Secure AI, was similarly critical of Cruz's legislation on Wednesday.
"Ideally, Big Tech companies and frontier labs would make safety a top priority and work to prevent harm to Americans. However, we have seen again and again that they have not done so. The SANDBOX Act removes much-needed oversight as Big Tech refuses to remain transparent with the public about the risks of advanced AI," he said. "This raises many questions about who can enter the so-called 'regulatory sandbox' and why. We hope that we will get answers to these questions in the coming days."
Passing the SANDBOX Act, plus streamlining AI infrastructure permitting and opening up federal datasets to AI model training, is just the first pillar of Cruz's five-part framework. Part two focuses on combating government censorship. The third section is about countering "burdensome" state and foreign AI regulations. Pillar four calls for protecting Americans from scams and fraud, as well as safeguarding US schoolchildren. The fifth prong is about bioethical considerations and AI-driven eugenics.
In the absence of federal regulation, states have acted on AI. As Reuters detailed Wednesday:
Several states have criminalized the use of AI to generate sexually explicit images of individuals without their consent. California prohibits unauthorized deepfakes in political advertising and requires healthcare providers to notify patients when they are interacting with an AI and not a human.
Colorado passed a law last year aimed at preventing AI discrimination in employment, housing, banking, and other consequential consumer decisions. The tech industry has lobbied for changes to the law, and the state legislature recently pushed forward its implementation to mid-2026.
In July, ahead of the introduction of Trump's plan, over 90 groups focused on consumer protection, economic and environmental justice, labor, and more collectively called for an AI blueprint that "delivers on public well-being, shared prosperity, a sustainable future, and security for all."
Branch, whose group is part of that coalition, said at the time that "AI is already harming workers, consumers, and communities—and instead of enforcing guardrails, this administration is gutting oversight."
He said the defeat earlier this summer of a Senate measure that would have prevented state-level regulation of AI for a decade sent a clear message from the public: "No more handouts for Trump's tech bro buddies."
"We need rules and accountability," Branch said, "not a Silicon Valley free-for-all."
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Judge Rejects Trump Unlawful Effort to Remove Fed Governor Lisa Cook
"According to the government, the determination of cause is committed to the president's discretion by statute, leaving no role for this court," said a federal judge. "The court disagrees."
Sep 10, 2025
A federal judge late Tuesday ruled against President Donald Trump's unlawful attempt to fire Federal Reserve Board Governor Lisa Cook last month, determining that the president's "for cause" argument was unconvincing as it was based on unsubstantiated accusations of wrongdoing and represented an executive overreach with worrying implications.
Trump claimed his attempted removal of Cook, whose legal team challenged it as politically motivated and an "unprecedented and illegal" violation of the Fed's statutory independence, was for falsified mortgage applications for homes Cook purchased prior to her appointment to the board, However, Judge Jia M. Cobb of the US District Court for the District of Columbia found that the alleged infractions were neither substantiated and also took place prior to her taking the position.
"According to the government, the determination of cause is committed to the president's discretion by statute, leaving no role for this court. The court disagrees," Cobb said in her decision.
The accusations against Cook center on accusations brought by Bill Pulte, a prominent political supporter of Trump appointed by the president to lead the Federal Housing Finance Agency (FHFA), which operates the public lending arms of both Fannie and Freddie Mac. Critics of Pulte have accused him of weaponizing his access to private mortgage data by sifting through records of Trump's perceived political enemies.
As economist Dean Baker wrote in a column last week, people would be wise to recognize Pulte's outsized role in the accusations Trump made against Cook.
"While the validity of Pulte's allegations will have to be determined by the courts, the real scandal is Pulte himself," wrote Baker. "He is supposed to be running the agency that oversees the processing of tens of millions of mortgages by two huge quasi-public agencies. We are not supposed to be paying him to rifle through mortgage documents to find and disclose dirt that Trump can use against his political opponents."
By ruling against Trump on Tuesday, Cobb sided with Cook's request for a temporary injunction. This means she will remain in her post, with full voting rights as a governor of the Fed Board, as the case proceeds in the courts.
"Today's ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference," said Abbe Lowell, an attorney on Cook's legal team. "Allowing the president to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law."
For now, Lowell added, Cook will "will continue to carry out her sworn duties as a Senate-confirmed Board Governor."
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Teamsters Rally in NYC After Amazon's 'Illegal' Firing of 150 Unionized Drivers
"Amazon would be nothing without its workers," said one worker. "We're the ones who power their profits. We're the ones who put our health and safety on the line every single day."
Sep 09, 2025
Teamsters and their supporters rallied outside a New York Amazon facility Monday in protest of what they said was an "illegal" firing of over 150 unionized drivers.
According to the union, the fired workers were employed by the delivery service provider Cornucopia, one of thousands of providers the company contracts with to deliver packages. These workers joined the Teamsters last year as the union went on strike in nine cities across the US.
Amazon claims these workers are not employees, but "contractors," and that firing them does not constitute illegal union busting.
The union, however, described this as "a phony shell game," saying that the contractors "wear Amazon uniforms, follow Amazon rules, and work off Amazon's routing software."
"Amazon calls the shots," read a statement from the union. "They are the employer and everyone knows it."
Last year, a National Labor Relations Board (NLRB) official in Los Angeles agreed that the company had engaged in unfair labor practices when it fired other unionized contractors in California, and determined that they did, in fact, count as employees of Amazon.
At the time, this ruling seemed to provide some clarity as Amazon workers fought to have their union recognized by the company, which has refused to recognize them for years.
This remained the case even after 2024, when more than 10,000 Amazon workers joined the Teamsters and the union launched the largest strike ever against the company right before the holidays, during which they demanded the company negotiate a fair contract that included wage increases and addressed workplace safety issues and illegal union busting.
Outside Amazon's DBK4 facility, which joined the strike last year, the Teamsters and their allies renewed calls for negotiation Monday.
"Amazon is breaking the law and we let the public know it," said Antonio Rosario, a Local 804 member and Teamster organizer.
Latrice Shadae Johnson, a Teamster who works at DBK4, added that "Amazon would be nothing without its workers."
"We're the ones who power their profits. We're the ones who put our health and safety on the line every single day. We're the ones who made them a $2 trillion corporation," said Johnson. "If Amazon thinks we're going to take this lying down, they have another thing coming. Our solidarity is only growing stronger."
That solidarity has come from many corners across New York City, with members of the City Central Labor Council, part of the AFL-CIO, taking part in the rally.
The Teamsters were also joined by democratic socialist state Sen. Kristen Gonzalez (D-59), who defeated the industry-backed cousin of former Queens US Rep. Joe Crowley in 2022.
"I've been in office three years, and every single year I've been right here in this spot because every single year Amazon has done union-busting," Gonzalez said to cheers from the crowd, "It's because they think they are above the law."
In 2024, Amazon joined a lawsuit filed by Elon Musk's company SpaceX, arguing that the NLRB, which is responsible for adjudicating labor rights violations, is unconstitutional because its members cannot be fired at will by the US President.
Just one week into his term, President Donald Trump fired NLRB member Gwynne Wilcox, effectively crippling the board's ability to rule on union-busting cases.
According to LaborLab, which publishes reports on corporate union busting, "Without a functioning board, companies like Amazon and Tesla can engage in union-busting tactics with impunity, facing no legal consequences for violating workers' rights."
The progressive state assemblyman Zohran Mamdani, currently the frontrunner to be New York City's next mayor, brought national attention to the Teamsters' plight on Monday.
"One of the most powerful corporations in the history of the world is firing unionized drivers in Queens," Mamdani wrote on X. "Solidarity with the Teamsters who rallied today against these unjust layoffs and to demand good faith negotiations."
Several Democratic members of the House of Representatives from New York, including Jerry Nadler and Alexandria Ocasio-Cortez, issued their own statements of solidarity, as did Republican Mike Lawler.
"Any company that denies workers the right to choose [collective] bargaining rights, including Amazon, should be confronted," Lawler said. "Unions are the backbone of this country. They helped build this country. And they damn well will ensure we have a strong and secure country moving forward."
Nadler added that he stood "with Amazon Teamsters as they rally in Queens today to hold Amazon accountable for its unlawful anti-union activity."
"Amazon," he said, "stop union busting and start bargaining a fair contract now!"
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