Trump's 'On-Again, Off-Again' Tariffs Damaging US Standing, Says Economist Justin Wolfers As Americans Feel 'Miserable' In B-Minus Economy

University of Michigan economist Justin Wolfers has issued a sobering “B-minus” grade for the U.S. economy, warning that inconsistent trade policies by the Donald Trump administration and a historic collapse in consumer morale are masking deeper systemic instabilities.

‘Grade Inflation’ Warning

Appearing on CNN, Wolfers—author of the widely used Principles of Economics textbook—offered a blunt assessment of the nation's financial health.

While the data suggests the economy is “not terrible,” Wolfers argued that his B-minus rating is generous given the current state of “grade inflation” in American discourse.

“The good news is things aren’t terrible. The bad news is things aren’t great,” Wolfers said. He pointed to a labor market where the unemployment rate has “drifted up” over the past year and inflation remains stubbornly above the Federal Reserve's targets, squeezing household budgets despite the administration’s “rosy glasses.”

Geopolitical, Fiscal Fallout

A primary driver of this stagnation, according to Wolfers, is the administration’s erratic approach to global trade. He noted that America's international standing has been “remarkably undermined” by what he described as “on-again, off-again tariff stances” and unpredictable foreign policy maneuvers.

These trade tensions coincide with a domestic fiscal crisis. Wolfers characterized the current budget deficit as “extremely large,” noting it is likely too massive for this specific stage of the business cycle.

This combination of global isolationism and domestic overspending has created a volatile environment for investors and consumers alike.

‘Miserable’ Public Sentiment

Perhaps most concerning is the psychological state of the American consumer. Despite headline growth figures, Wolfers highlighted that consumer confidence is currently hovering near an “all-time low.”

“You’ve got things like consumer confidence currently at pretty close to an all-time low,” Wolfers noted.

“So there's a lot of people feeling pretty miserable out there.” This “misery” appears to be driven by the disconnect between official economic reports and the daily reality of rising costs and cooling job security.

Major Benchmarks Advance Over 2026 So Far

The S&P 500, Dow Jones, and Nasdaq 100 indices have risen by 1.74%, 1.31%, and 3.24%, respectively, on a year-to-date basis.

On Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and the Nasdaq 100 index, respectively, closed mixed. The SPY was down 0.010% at $695.42, while the QQQ advanced 0.33% to $633.22.

On Thursday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were mixed.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Shutterstock/ Evan El-Amin