What the Jobs Report Tells Us About the Economy
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- in Economy
How Trump’s Attacks on the Fed’s Powell Have Intensified
<!–> [!–> <!–>Powell’s termination cannot come fast enough!–> April 17 <!–>I don’t know why it would be so bad, but I’m not going to fire him.–> June 12 <!–>I talked about the concept of firing him.–> July 16 <!–> –> <!–> –><!–> [–><!–> –><!–> [–><!–>Mr. Trump nominated Mr. Powell to his post in 2017. But […] More
- in Economy
Rising Inflation Underscores Risks in Trump’s New Tariff Threats
New data showing price increases last month could foreshadow even higher costs if the president imposes steep tariffs on Aug. 1.President Trump’s steep tariffs have started to weigh on consumers’ wallets, sending prices higher as the White House readies a more drastic — and potentially costly — expansion of its global trade war.The risks in Mr. Trump’s economic strategy began to show on Tuesday, with the release of data that found inflation had accelerated in June. Prices rose noticeably on appliances, clothing and furniture, products that are all heavily exposed to the president’s taxes on imports from Canada, China and other major trading partners.The inflation report undercut Mr. Trump’s continued assertions that Americans would not face financial repercussions from his increasingly aggressive trade brinkmanship. Since taking office, the president has imposed withering duties on allies and adversaries alike, with additional taxes on a range of products such as cars and steel.The latest reading of the Consumer Price Index recorded the first signs of what economists had predicted all along, with U.S. businesses and consumers shouldering a growing share of the burden from the taxes Mr. Trump has imposed on imports.The data also carried perhaps a new warning for the president as he prepares another round of tariffs on dozens of countries in about two weeks, including a 30 percent tax on the European Union. Some experts said that an uptick in inflation could foreshadow more significant price increases later, especially if Mr. Trump proceeds as planned.“Up until this report, you could have argued that inflation is on a journey lower,” said Padhraic Garvey, who leads ING’s research team for the Americas. “Now we are on a journey higher.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Trump Takes Reins on U.S. Economy With Policy Bill and Tariffs Renewal
His expensive tax cuts have been signed into law. His steep global tariffs are taking clearer shape. And his twin campaigns to deregulate government and deport immigrants are well underway.With the major components of his agenda now coming into focus, President Trump has already left an indelible mark on the U.S. economy. The triumphs and turbulence that may soon arise will squarely belong to him.Not even six months into his second term, Mr. Trump has forged ahead with the grand and potentially disruptive economic experiment that he first previewed during the 2024 campaign. His actions in recent weeks have staked the future of the nation’s finances — and its centuries-old trading relationships — on a belief that many economists’ most dire warnings are wrong.Last week, the president enacted a sprawling set of tax cuts that he believes to be the ingredients for rapid economic growth, even as fiscal experts warned that the law may injure the poor while putting the U.S. government on a risky new fiscal path.Then, on Monday, Mr. Trump began to issue his latest round of tariff threats, insisting that “we’re done” negotiating as economists warned about a potential surge in consumer prices that could arise from taxing imports.The White House also proceeded with its aggressive and legally contested plans to eliminate scores of federal regulations and deport millions of migrants. The immigration crackdown, in particular, could come to the detriment of many sectors, like agriculture, that rely heavily on foreign labor, experts believe.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
White House Faces Risk of Economic Fallout From Iran Strike
President Trump, aware of how high gas prices could affect his popularity, demanded on social media that the U.S. “KEEP OIL PRICES DOWN.”President Trump on Monday began to confront the potential economic blowback from his military strikes on Iran, which threatened to send oil and gas prices soaring at a moment when U.S. consumers are already facing significant financial strains.The mere prospect of rising energy costs appeared to spook even Mr. Trump, who took to social media to push for more domestic drilling while demanding that companies “KEEP OIL PRICES DOWN”; otherwise, they would be “PLAYING RIGHT INTO THE HANDS OF THE ENEMY.”“I’M WATCHING!” the president added.By midday Monday, global oil markets appeared relatively muted, two days after Mr. Trump dispatched U.S. bombers on a mission to disable three Iranian nuclear sites. Prices rose over the weekend before ultimately settling, as Washington — and the rest of the world — braced for the possibility that Tehran may still retaliate.In one worst-case scenario, Iranian leaders could look to shutter or otherwise impede access to the Strait of Hormuz, the narrow waterway that serves as the critical entrance point to the Persian Gulf. The world ships substantial amounts of oil and liquefied natural gas through the passage, so any interruption to commerce could cause energy prices to surge globally.A spike in energy costs could prove especially difficult for American consumers and businesses this summer, given that it could arrive at about the same time that Mr. Trump plans to revive his expansive, steep tariffs on nearly every U.S. trading partner. Many economists expect those levies to push up prices after years of high inflation.In April, the president announced, then suspended, those sky-high duties, seeking to quell a global market meltdown over his disruptive and legally contested campaign to remake global trade. But Mr. Trump has not wavered in his plan to implement the tariffs on July 9, and many economists expect companies — which pay the duties when they source foreign products — to pass the added costs down to their customers.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Fed’s ‘Wait and See’ Approach Is Intact as New Risks Cloud Economic Outlook
The central bank is set to hold interest rates steady for its fourth straight meeting, a pause that could be extended through the summer.Through all the twists and turns of President Trump’s tariffs, a widespread immigration crackdown and the scuffles surrounding the Republican tax and spending bill, the Federal Reserve has stayed steady in its stance that it can go slow in taking action on interest rates.That message holds as officials gather on Tuesday for a two-day meeting, at which they are set to extend a pause in rate cuts that has been in place since January. It is also likely to endure throughout the summer, giving the Fed at least a couple more months before it must make a difficult decision about when and by how much to lower borrowing costs.“As long as the labor market continues to look solid but inflation continues to mainly move sideways, it’s going to be a ‘wait-and-see’ situation,” said Jon Faust, a fellow at the Center for Financial Economics at Johns Hopkins University and a former senior adviser to Jerome H. Powell, the Fed chair.When the central bank sets monetary policy, it has two goals in mind: keep inflation at 2 percent and ensure that the labor market is healthy. Currently, both aims are in sync.Inflation has stayed remarkably stable in recent months. The latest Consumer Price Index report, released last week, showed price pressures remain well contained. Employers are hiring less than they once did and fewer workers are entering the labor force, but layoffs have yet to rise in a meaningful enough way to lift the unemployment rate.The economy has all the makings of a soft landing, a rare feat in which the central bank tames inflation without pushing the economy into a recession. But such an outcome is not guaranteed. Mr. Trump’s policies have stoked fears that inflation will eventually re-accelerate, growth will slow and the labor market will weaken, forcing officials to make a tough decision about which of their goals to prioritize.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
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Where’s the Inflation From Tariffs? Just Wait, Economists Say.
Are predictions for a jump in consumer prices too early, or just wrong?Tariffs raise consumer prices. It’s a view held by most economists since long before President Trump entered the White House.Prices rose when Mr. Trump imposed levies on China in his first term, though that did not translate to noticeably higher inflation overall. Forecasters have been bracing for months for it to happen again on a much larger scale, given that his tariffs this time are substantially larger and more widespread.But data released this week showed that inflationary pressures remained more muted than expected at this stage, raising an uncomfortable question for economists: Are their predictions wrong?Economists are undeterred — for now. It’s not that tariffs aren’t affecting prices, they say. It’s that this isn’t happening in a significant enough way just yet to show up in broad measures of inflation like the Consumer Price Index. They argue that the impact will be much more significant this summer.“Inflation is very likely going to increase,” said Marc Giannoni, chief U.S. economist at Barclays, who formerly worked at the Federal Reserve’s regional banks in Dallas and New York. “It is a question of time, not so much of if.”Mr. Trump’s tariffs have already rippled through the economy in several ways.Businesses rushed to stock up on products before levies were imposed, and now imports of foreign goods are down sharply. Uncertainty has skyrocketed, stoked by the administration’s frequent pivots on its trade policy. On Thursday, it announced that steel tariffs would soon apply to appliances made with the metal, including dishwashers, washing machines and refrigerators. More
- in Economy
As Trump’s Tariffs Reshape Trade, Businesses Struggle With Economic Uncertainty
At the worst point of the labor shortage that emerged in the wake of the Covid-19 lockdowns, Thunderdome Restaurant Group had 100 people sign up for a job interview and only 15 show up. Of the two workers it hired, one never came in.The job market has cooled significantly since then, and Joe Lanni, who runs the Cincinnati-based company with his brother, now faces a different dilemma: how to grow the business, which has over 50 locations, while controlling costs as concerns about the economy spread.So they’re rethinking menu items like freshly made tortillas that require a dedicated full-time worker. They are also planning to shutter a handful of locations where sales have been softest, while adding more outposts of their fast casual restaurants that are doing well.Uncertainty about the economy has skyrocketed as President Trump has begun to radically reshape the global trading system with tariffs, cut off a crucial supply of workers with an immigration crackdown and floated big changes to the rules and regulations that govern how businesses operate. Consumers, who fuel the American economy, have become more hesitant to spend, and according to recent surveys, both the services and manufacturing sectors are slowing.But the economy does not appear to be at the cliff’s edge just yet, and employers like Mr. Lanni don’t want to be too cautious and miss out on opportunities.As his restaurants gear up for outdoor service this summer, Mr. Lanni said, he still expects head count across the company to swell by about 200 people, to around 1,500 employees, before receding in the fall. The stakes are high, however.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
