Trump's tariffs hurt job growth and escalate inflation
- Revised job reports show that only 19,000 jobs were added in May and 14,000 in June, indicating a troubling slowdown in hiring.
- America's GDP grew at a mere 1.2 percent rate in the first half of 2025, below expectations and prior growth rates, as tariff impacts begin to show.
- Inflation is rising, complicating economic conditions as the Federal Reserve faces challenges in responding to both inflation and job market issues.
In the United States, the economic indicators have recently painted a concerning picture of the nation’s economy. After a series of revised job reports, it was discovered that job additions had plummeted, with employers adding only 19,000 jobs in May and a mere 14,000 in June, significantly lower than earlier estimates. The gradual slowdown in economic growth is evident, with the Gross Domestic Product (GDP) expanding at only a 1.2 percent annualized rate in the first half of the year, far below the expectations set during the previous year's growth projections. The agricultural and manufacturing sectors, which are sensitive to trade policies, have experienced substantial job losses, leading to an overwhelming reliance on the health care sector, which has accounted for almost all job growth in recent months. Furthermore, inflation continues to rise, with consumer prices increasing by 2.6 percent year-over-year as of June. This uptick in inflation occurred even as economic growth decelerated, leading to a complex economic landscape. Core inflation metrics also indicated a rise of 2.8 percent over the same period. The persistent uptick in inflation, driven in part by rising costs in non-housing services, has created a dilemma for the Federal Reserve, which normally adjusts interest rates in response to inflation or job growth changes. As the situation unfolds, the economic outlook appears less optimistic than it did just a week ago. Economists are now speculating on the rising risk of a recession should unemployment rates increase and consumer spending decline. Observers have noted that if Trump’s trade policies, particularly his tariffs, continue to exert upward pressure on consumer prices, the Federal Reserve could be forced into a challenging position of balancing interest rates amid slow job growth. In summary, the American economy reflects significant vulnerability as inflation rises and job growth stagnates or declines, largely attributed to the impact of Trump's tariffs. If current trends persist, consumers may find themselves facing higher prices alongside dwindling job opportunities, which could further throttle economic momentum and eventually lead to a recession.