Stiglitz Warns U.S. Economy Faces Growing Risks Despite Surface Growth
Nobel Prize-winning economist Joseph Stiglitz has warned that the U.S. economy is worsening despite recent growth reports. He pointed to rising inflation from tariffs, shrinking indeed jobs, and uncertainty over the Federal Reserve's interest rate decisions as key threats.
Stiglitz highlighted the impact of tariffs introduced under Donald Trump in 2018, which have pushed up prices and hurt lower-income families. The poorest 10% of households now face a sharp decline in disposable income due to tariff-driven inflation.
Manufacturing employment has struggled for over two years, with only minimal gains compared to other sectors. Between February 2024 and February 2026, manufacturing jobs grew by just 50,000—reaching around 13 million—while total nonfarm payrolls increased by over 3 million, according to Bureau of Labor Statistics data. The services sector alone added 2.5 million jobs in the same period, showing how manufacturing has lagged behind.
Low-skilled manufacturing roles have declined even faster, reflecting ongoing offshoring trends. Stiglitz also expressed concern about potential political pressure on the Federal Reserve, warning that premature interest rate cuts could worsen inflation and damage the central bank's credibility.
The economist's warnings come as investors grow uneasy about the Fed's next moves. With manufacturing jobs stagnating and inflation hitting vulnerable households, the U.S. economy faces mounting challenges. Stiglitz's assessment suggests a need for careful policy decisions in the months ahead.
