With a Practically null growth of employment In recent months, we have confirmation that Tariffs and restrictive policy of the Federal Reserve (Fed) are significantly slowing down the economic growth of the United States, since companies react to the high uncertainty stopping hiring. Reviews of payroll reports from previous months show that cuts in the public sector driven by the policy of Trump They now join the ongoing cyclical weakness. It should also be noted that, although the unemployment rate has risen slightly, it is still in the range in which it has been maintained for most of the year, which reflects the fact that the supply of labor is decreasing significantly, since the most restrictive immigration policy weighs on the participation rates of workers born abroad.
In 2024, the active population grew by 1% or about 175,000 workers, enough to maintain balance in payrolls (keep the unemployment rate stable). Now we could be facing a growth of only 50,000 workers in 2025. If this decrease had not occurred (for example, if more restrictive migratory policies had not been established), some estimates suggest that the unemployment rate would now be placed around 4.9%, given the current stagnation in employment creation, which would have caused a faster and more forceful response by the Federal Reserve.
In addition to the labor market healththese are some of the other key factors that will determine whether the US economy continues to advance towards a staging result:
Duty: Recent commercial ads have reduced to some extent the political uncertainty and have left the effective tariff rate. UU. between 15% and 20%, below the maximums reached in April. However, the tariffs applied to Mexico, Canada and China, the three main business partners of the United States, continue to fluctuate and are the most important for companies, consumers and the Federal Reserve. It is also possible that an American Federal Court fails against the use of the Trump administration of the International Emergency Emergency Powers Law (IEEPA) to impose generalized tariffs (a sentence is expected in the case in about 4-6 weeks), which could force the Government to reimburse tariff income. The administration could still find alternative ways to impose tariffs, but it would probably be more difficult to cover as many countries as quickly as with the IEP.
The deadline to make a decision about the Tariffs to Chinawith indications that President Trump could promote a meeting in autumn with the Chinese president. The recent decisions of the United States, including the authorization of the exports of the Nvidia H20 chip to China and the delay of a commercial agreement with Taiwan, could indicate that President Trump is opening the door to negotiate with China on technology, tariffs and Taiwan in exchange for access to critical minerals and help with Russia. This type of transactional agreement could eliminate pressure for inflation and risk assets.
Inflation: In general, the impact of tariffs on inflation was moderate in the first semester of 2025 thanks to various factorsamong them the decision of the companies to accumulate stocks before the entry into force of the tariffs and to adopt a stepped approach when applying price increases. Disinflation in energy, services and housing sectors It was also a key compensatory factor. More recently, basic consumer prices have begun to rise as some of these factors are mitigated. In the first half of the year, the US economy absorbed an effective tariff type of approximately 10%. Today, that type is between 15% and 20%, as indicated above. I hope that consumption prices continue to rise in the coming months, and that the inflation rate reaches its maximum in the fourth quarter of 2025 or the first quarter of 2026, depending on what happens with the tariff types for Mexico, Canada and China. The lower growth of the active population also means that Fed It cannot take for granted that salary growth, a possible engine of inflation, will continue to slow down from now on, which further complicates its task of calibrating interest rates, a topic that deals with more detail below.
Dwelling: the weakness It is beginning to leak from the existing housing market to the new housing market, as the affordability runs into a wall. The new housing market, although relatively limited, can have important side effects both on the labor market and inflation. He Employment growth in the critical sector of residential construction (6% of employment in the US.) It seems to be stagnant and could fall into negative field if builders delay the purchase of land and construction due to political and economic concerns. As for inflation, housing is a key piece of the panorama (35% of the consumer price index and 42% of the underlying inflation), and finally we are seeing signs of normalization in the growth of the rentals to the levels prior to the COVID, together with areas of the country where housing prices are lowering. This suggests the possibility of greater downward pressure on inflation in this key category.
Fed policy: With some weak payrolls and increasing inflationthe Fed faces a possible dilemma of stagning and some difficult decisions, since it is pushed in opposite directions in the fulfillment of its double mandate (a challenge that has been highlighted with the recent disagreement of some members of the FOMC regarding decisions about interest rates). The Central Bank has many issues to address: how long will it take before the lack of hiring becomes dismissals? Are the Commercial Agreements and the One Big Beautiful Bill Act law positively changed contracting intentions? To what extent will the tariffs up to Mexico, Canada and China, given the direct impact they will have on inflation?
The indicators of labor marketincluding the unemployment rate and salary growth, they will be important signs for the Fed on where the demand driven by demand is directed, given the context of higher tariffs and a continuous offensive against immigration. That said, although the Inflation reboundI hope that Fed focuses more and more on the weakening of the economy. Before the recent news about the labor market, I had planned cuts of types of 50 basic points by the Fed and, depending on the will of the government to reach commercial agreements, now I think we could see cuts of up to 100 basic points.