The unemployment rate held steady at 4.1 percent, but labor force participation was little changed at 62.3.
“You’re not just seeing any feed through for the tariffs as trade related stress,” said Joe Brusuelas, RSM chief economist to Yahoo Finance, and added, “We’ve got an absolutely solid payroll number,” but also gave this cautionary note, “This feeds right into the forecast of a slowing but solid economy.”
There is still economic uncertainty promulgated by President Donald Trump with his tariffs, first announced in the White House Rose Garden, on the so-called Liberation Day, albeit with the fuzzy math that international economists have criticized; and, all of which has not only caused consternation abroad, but for American consumers, the main drivers of the US economy, as they navigate prices from wedding gowns, (most of which are made in China), as well as steel, (ironically used to build Trump properties) and tariffs on aluminum that threaten a supermarket staple: canned goods.
All things considered equal, US employers have held back on hiring, but not enough for a deleterious effect, and with a steady hand on the tiller, the captains of industry are navigating threatening waters.
That aside, wages were up for June by 0.2%, an increase of 37 percent, which, for middle to high income earners allows them to deal with inflation, currently at 2.7 percent.
Overall, what we are seeing is a smaller, but still robust, labor market that, much to the disappointment of Trump, will not allow for a rate cut, but as Priya Misra, a portfolio manager at JP Morgan Chase Asset Management told The New York Times, “There is no urgency, they can keep pushing it into the future.”
Stephen Miran, Chair of the White House Council of Economic Advisors, was ecstatic in the news as well as damning administration critics, when he stated, “Once again proving that the haters and doom sayers don’t know what they’re talking about.”
As reported in the past few months, the heavy hitters are local and state governments with 75,000 jobs, whose numbers may be possibly swollen from those approximate 69,000 federal workers sacked by Elon Musk and his DOGE team; leisure and hospitality at 20,000, education and health at 51,000 and construction increasing to 154,000.
Feeding the national trend with online shopping, transportation and warehouse jobs are holdings steady at 75,000,
The losers? Manufacturing which lost 7,000 workers, and who in April lost 1,000 jobs, and whose losses are caused by a myriad of factors: disturbances in the global supply chains, trade disputes, and tariffs, but also by American manufacturers who invest far less in process innovation, as do other countries, for example, Japan, who has invested, on the main, 55 percent more than Americans have, at last count 23 percent.
Taking a look at overall economic growth there are estimations of only 0.1 percent and 13 percent growth on a year to year basis, while other corporate think tanks, accounting firms, and private investment firms predict slower growth over the next two years, beginning this year between 1.5 percent and 2 percent; with much of that attributable to lowered consumer spending, business investment, and government policy, up to and including tariff policies.
The hits to the GDP (gross domestic product) are predicted to drift downwards by the fourth quarter of this year, with some predicting a recession, and by 2026 a fall to 1.7 percent.
Latest news on tariffs from the Trump administration is that ahead of the July 9 deadline letters will be sent to at least 100 countries that if they do not meet that deadline for trade negotiations, tariffs will revert back to the April 2 rates, between 10 and 50 percent, according to Scott Bessent, US Treasury Secretary, in an appearance Sunday on CNN’s “State of the Union.”
While it’s been long known that Trump is not a globalist, the results would further sever not only relations with foreign markets, and increase prices for their goods in the US.
Of course, the biggest news from the administration is that Congress approved is “Big Beautiful Bill,” his term, a signature piece of legislation that encompasses gnarly everything the president wants to achieve as part of his economic and cultural legacy, including making permanent the 2017 tax cuts, that mostly favor the very rich, with only modest income increases for the lower and middle classes.
The greatest concern among administration critics, including Democrats, is that to cement the expiring his 2017 tax cuts, the revenue needed to create them will be taken from a reduction in Medicaid to approximately 11 million people, and whose work requirements for certain recipients, seniors excepted, or volunteer work, and whose monthly reporting may prove onerous, especially to those tech challenged, or without access to the internet to file those reports may find themselves dropped and, the result will see a greater reduction in program coverage.
This coupled with cuts from the Supplemental Nutrition Assistance Program (SNAP) increases revenue enhancement, but will affect individuals, and families, especially those living in states with Medicaid expansion and in combination with the Affordable Care Act, has supported the health care needs of adults, and children, especially those with special needs, both developmental and genetic.
The result is that for those in these groups, their monthly budgets, already stretched thin, will be so even further as they attempt to fill the holes, and pay rent, or mortgages; despite the president stating that a family of four will gain at least $13,000 per year from the passage of this bill.
While economists disagree with him, and point to an assumption of an increase in the GDP, this bill can also affect employment in rural hospitals, since many may close, creating job loss; plus a crisis of care additional costs of care that might not be met by Medicaid, even if some remain open. Joining that concern is that one out of every four people in rural America are on Medicaid.
The biggest result of the bill, originally HR 1 from the US House of Representatives, adds a huge deficit to the US economy, as Factcheck.org noted in early May:
“The bill is certainly not the largest deficit reduction in nearly 30 years – it’s not deficit reduction at all,” Marc Goldwein, senior vice president of the nonpartisan Committee for a Responsible Federal Budget, told us in response to Leavitt’s claim. The increase to the deficit over 10 years will be $3.1 trillion with interest, according to CRFB’s breakdown.”
In response to the stated benefits from The White House, from Press Secretary Karoline Leavitt, they added, “The Tax Foundation, for instance, concluded, based on the version of the bill passed by the Senate Finance Committee, and accounting for the economic growth expected to be spurred by the bill, that the percentage change in after-tax income increases — on average – as income rises. For example, in 2034, those in the bottom 20% of earners are expected to see a 0.5% increase in after-tax income. That percentage increases to 2.6% for the next 20% of earners. Those with incomes in the middle 20% — who earn between $38,572 and $73,905 — would see a 3.5% increase in after-tax income in 2034. The largest increase — 3.7% — would accrue to those in the top 20%, the Tax Foundation said.”
In a further analysis of the aforementioned lower income population, “The Penn Wharton Budget Model looked at the effect of the Senate version of the bill on lifetime income, and factored in the effect of cuts to Medicaid and food assistance. Using a model that takes into account the expected economic growth from the plan, the PWBM found, “that households most affected by the cuts to Medicaid and SNAP — those in the bottom income quintile — experience the largest losses under this bill, averaging $27,500 in lifetime value for the working-age population.”
If the “Big Beautiful Bill”, or B3 as some has dubbed it, was the biggest news over the holiday weekend, then it bears looking at the role of the Federal Reserve, principally its chair, Jerome Powell who Trump has attacked over not lowering interest rates, and sending him damning handwritten notes and also with floating the idea of a shadow chair, possibly Bessent.
We have noted over several reports over many months that Powell is data driven and the data and the role of interest rates is depending on macro economic basics, not political desires. And, one of Powell’s concerns, and data points, are tariffs, especially in their uncertainty, and especially now with Bessent’s announcements, and effects on consumer prices which history has shown, will see an increase.
