The unemployment data in the US of June stood at 4.1%. However, companies such as Microsoft continue to announce dismissals, where appropriate, 4% of their global workforce. How is the health of the labor market in the US?
Strength is still perceived in the US labor market, but alert signals begin to appear. There are certain indications that could anticipate problems in the coming months. Employment is a key factor in macroeconomics and usually anticipates possible recessions. However, for now we are not in that scenario: we have been hearing recession forecasts for three years that have not materialized, and many macroeconomic indicators remain solid.
The manufacturing PMI rose slightly to 49, but remains at a minimum of six months. What is telling us this figure?
The fact that the PMI is below 50 indicates a contraction, but that does not automatically imply a recession. To light a true alarm signal, the fall would have to be more pronounced and sustained. Despite the weakness in the manufacturing sector, other sectors, such as food, drinks or energy, continue to show dynamism. That is why we talk about a «yellow focus» rather than a red alarm.
Now, there are cooling signs: the new manufacturing orders are falling, which reflects a lower demand. In addition, the dependence on imported supplies – affected by tariffs and commercial tensions – also presses costs and slows production.
In summary, the panorama is still weak and the PMI is expected to continue going down in the third quarter, getting closer to typical recession levels. That is why it will be key to be attentive to the data of the third and fourth quarter, which could give clearer signs about the economic direction.
Impact of Donald Trump’s tariffs on the agri -food sector and most impacted countries
It is difficult to identify a single focus of impact, since practically the entire agri -food chain is being affected: from inputs to the final products. In the case of Vietnam, it is a robust manufacturing economy, largely driven by Chinese investments. For years, many companies have followed a strategy known as China Plus Onewhich consists of manufacturing in China and completing assembly or packaging in countries such as Vietnam, with the aim of reducing tariff load. However, with the new commercial agreement with the United States, all imports from Vietnam will be subject to a 20%tariff, and if it is proven that the products have been transfined from China, the rate could reach 40%. This new scheme is already impacting on the agri -food sector, especially among food importers in the United States. Initially, a 10% tariff was shuffled, but its 20% increase has raised the pressure on commercial margins. In practice, negotiation prices at source – in countries like Vietnam or Spain – are adjusting to absorb part of the extra cost. For example, aquaculture products such as shrimp or Pangasius, which are exported in large volumes from Vietnam to the US, could see their reduced base price from 1 dollar to 0.90 or 0.92 to compensate for the impact of the tariff. It should be remembered that approximately 80% of the aquaculture products consumed in the United States are imported, with Vietnam and China as main suppliers.
In Europe, Spain faces similar challenges. Although it does not have broad commercial agreements with the United States, some sectors could be specially affected. One of them is that of olive oil, with more than 180,000 tons exported annually to the US. An additional tariff would make a product considered basic both in the European market and in the American, and would directly affect key producing regions.
In short, tariffs increase costs throughout the chain. Although not all the increase moves to the final consumer, the load ends up distributing between producers, importers and distributors. Sooner or later, part of that impact will be reflected in the price paid by the consumer.
Will Fed finally cut the rates this year?
To answer, several factors must be considered. One of them is the acquaintance dot plotan internal Fed tool that collects the expectations of its members about the evolution of interest rates. According to this graph, most projections point to more significant cuts around 2026, and not so much for 2025. However, there are variables that could alter that panorama. If internal consumption begins to slowly slowly, the Federal Reserve could be forced to act earlier than expected to avoid a more severe contraction of the economy. But there is a trap: newly announced tariffs are also inflationary, which further complicates the equation. Cutting rates in an upward prices environment could be counterproductive.
Despite uncertainty, some indicators begin to show relief signs. The Personal Consumption Expenditure Index (PCE), the inflation measure preferred by the Fed, is moderating, which opens the door to possible modest cuts – perhaps one or two – towards the third or fourth quarter of 2025. However, the environment remains volatile. The recent approval of the call Big and Beautiful Billan ambitious fiscal reform promoted by the Trump administration, could have an additional inflation effect, depending on how its measures are implemented. The bond market will be a good thermometer to anticipate where the Fed is going. But if the inflation risk weighs more than the risk of a slight recession, Powell will remain firm. It will not lower the rates only by political pressure.
In short, everything will depend on the balance between consumption, inflation, housing and business activity. Although the pressure from the White House grows, the Fed seems determined not to move until it has clearer signs.