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Nearly six months into his second term, President Donald Trump has imposed global tariffs, orchestrated a crackdown on immigration and pushed a sweeping tax-cut bill through Congress - moves that could significantly alter the U.S. economy, but haven’t yet.

The country’s economy has remained relatively stable and upbeat under Trump, according to many metrics, although economists caution that they see potential warning signs ahead.

Stock markets have rallied, the inflation rate is steady and unemployment remains low, ticking down to 4.1 percent in June. Trump’s One Big Beautiful Bill promises to extend massive tax cuts, and benefit corporations and wealthier Americans - provisions that could boost parts of the economy.

The White House takes credit for the good signs in the economy, saying they are “laying the groundwork for a long-term restoration of American Greatness. President Trump’s “America First" agenda of tariffs, deregulation, energy abundance, and tax cuts - such as those in the One Big Beautiful Bill - unleashed a historic economy during his first term,” White House spokesman Kush Desai said in a statement.

Still, many analysts say that the future of the U.S. economy under Trump remains uncertain. Gross domestic product shrank in the first quarter of the year in part because of surging imports, and consumers are feeling hesitant and spending less. It’s also too soon to know the full effect of Trump’s widespread tariffs, especially with a deadline approaching to get deals completed with many countries before levies rise once more. And as immigrants leave the workforce, either voluntarily or by deportation, a lack of workers could create labor shortages in certain key areas and fuel wage inflation.

Several economists expressed concern that things do not look as rosy as they did at the end of last year.

“We’ve taken an economy that was growing above trend, and it’s now sort of shifting sideways,” said Douglas Holtz-Eakin, who was chief economist for President George W. Bush’s Council of Economic Advisers and is president of the American Action Forum, a conservative-leaning think tank. “It’s not bad news yet, but it’s not good news.”

Trump won office in large part by pledging to bring prices down for Americans, promising to “end inflation and make America affordable again.”

The inflation rate has shown signs of stability during the president’s second term - it has remained mild despite the tariff fluctuations, rising just 2.4 percent in May in the consumer price index. That’s the lowest it’s been since 2021.

“I’m pretty bullish right now on the economy. I think it’s hard to see any negative sides,” said Stephen Moore, a former senior economic adviser for Trump. “I do believe what really happened was that there was fear and fury over the tariffs when they came out. Once Trump started making trade deals to get other countries to lower their tariffs, the economy and stock market turned around on a dime.”

Still, the Federal Reserve does not think the economy has escaped inflation and opted to forgo an interest-rate cut at its last meeting. Chair Jerome H. Powell has said the central bank remains in a “wait-and-see” mode as it continues to gauge the outcome of Trump’s trade war and other policies, a delay Trump has criticized.

The U.S. labor market also continues to show signs of resilience, adding 147,000 jobs in June. Hourly wages outpaced inflation, and layoffs remain low. But businesses have added jobs at a slower pace this year compared with last year, and hiring has fallen to a standstill in many industries.

Economists are keeping a close eye for signs that tariff policies, federal government job cuts and a crackdown on immigration could trigger widespread job losses. Diane Swonk, chief economist at accounting giant KPMG, said the “margin of error in the labor market is small.”

“I’m worried about the headwinds that are building,” Swonk said, pointing to upcoming potential tariff rate increases.

Despite uncertainty around changing tariff policies, the financial markets have rebounded from a worrisome sell-off in April.

Trump faced a financial market backlash when he imposed sweeping, double-digit tariffs on nearly every country in the world. Major stock markets plummeted on the news, as economists predicted prices would surge and shoppers would see shortages. And the bond markets flashed warning signs.

But as Trump backed off most of the higher tariffs he first announced, the major financial markets recovered the ground they lost and were especially reassured once the White House opened talks with China, the nation’s second-largest trading partner. The bond markets have also settled down.

The big question fueling uncertainty is what happens with tariff policies going forward. Trump imposed a round of “reciprocal” tariffs on dozens of countries earlier this year. Those are paused while talks are ongoing. But Trump and trade officials have warned they could resume on or after July 9 if U.S. leaders feel countries are not negotiating in good faith. On Thursday, Trump warned that some of those tariff hikes could be coming.

“If he were to reinstate the Liberation Day tariffs, we would have a recession in the second half almost for sure,” Holtz-Eakin said.

The tariff rates imposed this year are already showing up in economic data. GDP, the sum of goods and services in the economy, fell at an annualized rate of 0.5 percent in the first quarter of the year, in part because imports increased significantly as companies front-loaded their inventories in anticipation of tariffs. That was slightly offset by an increase in investment.

Cracks have also appeared in other parts of the economy as consumers are feeling wary, which can dictate how much people spend, which fuels close to 70 percent of the economy.

A closely watched metric of economic outlook shows that Americans’ feelings about the economy have been falling for much of this year, dropping for four months before flattening in May. Consumer sentiment edged up in June, as tariffs remained paused and markets rallied, but the benchmark remains lower than it was in all of 2024.

That sentiment is starting to show up in how people open their wallets. Consumer spending dropped in May, after growing at a slower rate in April, as people pulled back spending on cars and eating in restaurants.

Also, international tourism to the United States has fallen significantly, with Trump’s aggressive rhetoric and policies turning travelers away, particularly from neighboring Canada, which is starting to affect leisure and hospitality sectors that depend on international tourists.

Separately, economists are worried that Trump’s massive deportation effort could start driving worker shortages, which can fuel inflation, as employers are forced to pay higher wages to attract workers. During his campaign, Trump had accused undocumented immigrants of taking American jobs, adding at one rally, “we are going to save you.”

Economists at Washington think tanks expect Trump’s immigration policies to drive immigration close to zero in 2025. Already, the immigration slowdown is shrinking the labor supply and could push up inflation by the end of the year in industries such as agriculture, construction and hospitality, Federal Reserve governor Adriana Kugler said in a speech last month.

The Trump administration expects the tax and spending bill that Congress passed Thursday to give the economy a boost. The package will extend significant tax cuts enacted during Trump’s first term. It would also make permanent some corporate tax cuts and sweeten tax breaks on some corporate investments - moves that companies have said will make it more enticing to pour their investment funds into U.S. markets.

But it would also add trillions of dollars to federal deficits and cut health care benefits for millions of poorer Americans.

White House leaders say they are confident about the legislation’s approach: “Critics should get ready for another historic economy in President Trump’s second term,” Desai said.

Economists are still waiting for the full effects of Trump’s tariff, immigration and other policies to show up in economic data, and say that much hinges on what happens with tariff rates in coming months.

“Nothing has been a catastrophe so far, but there’s clear signs of slowing in the economy,” said Michael Pearce, deputy chief U.S. economist at Oxford Economics.

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Lauren Kaori Gurley, Aaron Gregg, Abha Bhattarai and Andrew Ackerman contributed to this report.