Government Shutdown's Impact on Contractors and Small Businesses

    Over the past month, the impact of the ongoing government shutdown has begun to weigh heavily on businesses that work with the federal government. According to a new report released Thursday by the U.S. Chamber of Commerce, government contractors have collectively lost around $12 billion since the shutdown began on October 1.

    The report, which is being sent to members of Congress, highlights that 65,500 small businesses across the country are losing roughly $3 billion each week. These companies provide a range of services — from high-tech manufacturing and office supplies to landscaping — and many rely on government contracts for a large portion of their income.

    Neil Bradley, executive vice president of the Chamber of Commerce, said in a letter that while federal employees are guaranteed back pay once the government reopens, contractors have no such protection. “When the government reopens, rarely are contractors made whole,” Bradley wrote, noting that many purchases are permanently lost during shutdowns.

    In order for the shutdown to end, there needs to be a "bipartisan" short-term spending bill which is all but bipartisan as of now. The Democratic party is pushing for the inclusion of ACA tax credit extensions before they agree on a deal. 

    With pressure continuing to build on getting a deal done, it will be interesting to see how the contractors continue to deal with this with no promise that they will get the pay they once agreed upon with another party. 

Link to Article: https://www.cnbc.com/2025/10/30/government-shutdown-business-chamber.html 

Fed Chair Powell Says Don't Count on a December Rate Cut

 On October 29th, the Fed cut rates by a quarter of a basis point to combat unemployment from surging.  This cut dropped the benchmark lending rate to a range of 3.75% - 4%.  This is the first time that there has been a "dueling dissent" in the decision of what to do with the Fed rates.  There were two opposing views on opposite policies.  One to cut rates by half a basis point and one to leave the rates as they are.  Along with these dueling perspectives, the decisions for the Fed rates are also occurring when there has been no government employment data as a result of the shutdown.  Employment is struggling, and the addition of jobs is at its lowest it has been since 2010.  Powell has said that the decisions are currently being made during a time of blindness for the Fed.  He has made it very clear that it is hard to make decisions about the conditions of the U.S. economy.  Data trends and private sector data that have been released by ADP are incite into the economy but are nothing compared to the government data that is typically used and considered the "gold standard".

Along with concerns about the economy's status and the lack of information due to the government shutdown, there are concerns about inflation rates.  Powell has said that, as of now, we are not seeing significant inflation, but this is mainly due to the tariffs and that businesses are doing a good job in not passing the increased expenses from tariffs onto customers.  He says, though, that because of the time it takes for tariffs to reach consumers, some inflation is going to occur.  Although we aren't seeing high inflation right now, tariff inflation is expected.  The September CPI showed unexpectedly reasonable values; however, this is likely to change as price pressures are apparent with the new tariffs.  With all this being said, the short-term inflation is hoped to be stopped by the tariffs, and this is what drove the most recent Fed rate cut.  The Fed will be in a tricky position if crucial government data is still not released in the near future as a result of the government shutdown.

https://www.cnn.com/2025/10/29/economy/fed-october-rate-decision

Global Commodity Prices Hit Six-Year Low, Easing Inflation but Raising New Concerns

 Global commodity prices have dropped to their lowest level in six years, according to a new World Bank report released this week. Prices for energy, metals, and food have all been falling as demand slows and supply improves around the world.

Energy prices, including oil and natural gas, are expected to fall by about 12% next year, while food prices could drop around 6%. This is helping cool inflation in many countries, giving consumers and businesses a bit of relief after years of high costs. Economists say that lower commodity prices are one reason inflation might finally return closer to normal levels by next year.

However, the report also warns that this drop reflects a slowdown in the global economy. Countries that depend on exporting oil, metals, or crops are being hit hard by lower prices, which could lead to weaker job growth and less government spending in those regions.

There’s still a lot of uncertainty ahead. If interest rates keep falling, demand could pick back up, but ongoing trade tensions and tariffs could make things unpredictable. Some analysts also point out that while inflation is easing, the slowdown in demand isn’t necessarily good news for long-term growth.

Overall, the decline in commodity prices is a mixed signal. It’s helping to ease inflation, but it also shows that the global economy may be losing some strength heading into 2026.

Source: https://www.worldbank.org/en/research/commodity-markets

Federal Reserve cuts key interest rate in bid to boost job market

The Federal Reserve today (Wednesday 29th October 2025) cut its benchmark interest rate by 0.25%, which is its second rate cut this year, in order to stimulate economic activity in the country and to boost investment. This decision was made despite concerns about persistent inflation and fairly low unemployment rates because job hiring is low and firms seem to be laying off workers indicating that the labor market is sluggish.

There isn't really a clear way forward because the US economy is very uncertain. The Chair of the Fed, Jerome Powell compared the current economic uncertainty to driving in the fog and emphasized slowing down. The rate cut aims to make borrowing cheaper for consumers and businesses but it also risks further fueling inflation, which recently rose to 3%, above the Fed’s 2% goal. It's going to be interesting to see how the economy progresses and what the Fed will do on December 10th when it makes its next rate decision.

This rate cut comes as the US economy faces a dilemma with the labor market cooling while prices are still high. Hiring rates have collapsed to levels last seen in the years following the 2008 global financial crisis, and the ongoing government shutdown has also made it harder to assess the economy, as key data releases are delayed. And economists say lower interest rates can sometimes worsen inflation by increasing economic activity. Jerome Powell acknowledges this risk especially looking at the effects of President Trump's tariffs that suggest that inflation could continue to increase.

The issue also is that, the economy is showing mixed signals with strong GDP growth driven by an AI investment boom. Powell described the rate cut as a risk management step to balance the conflicting trends in the economy.

There is disagreement within the Fed about what to do next. Powell stressed that another rate cut at the December meeting is not guaranteed. Some policymakers urge caution, warning that lowering rates too quickly could worsen inflation, which is also being driven by tariffs. And some analysts believe that the tension between elevated inflation and the labor market cooling is easing, but not for reasons that look good for the broader economy. 

Ultimately, the Fed is navigating a complex situation because inflation remains stubborn, the labor market is fragile, and government shutdown has made economic data incomplete. Fed governor, Christopher Waller made a really good point here, "either economic growth softens to match a soft labor market, or the labor market rebounds."

Source: https://www.nbcnews.com/business/economy/federal-reserve-interest-rate-decision-rcna240337

Wall Street VS. Main Street: America's Split Economy

While consumer confidence fell again in October, slipping to 94.6 from 95.6 the month before, the stock market seems to be telling a completely different story. On Monday, all four major U.S. stock indexes, the Dow Jones, S&P 500, Nasdaq, and Russell 2000, hit record highs on the same day, something that rarely happens. Investors are feeling upbeat thanks to strong corporate earnings, expectations for another Federal Reserve interest rate cut, and hopes that trade talks between the U.S. and China will go smoothly. It’s the kind of mix that fuels optimism. There's cheaper borrowing, solid profits, and calmer headlines.

But every day, Americans aren’t feeling the same excitement. Survey results show that people are growing more worried about their future income and job stability, and prices for gas and groceries remain high. Inflation may have slowed a bit, but it’s still eating into paychecks. Many households feel like the stock market boom benefits investors, not average families. In that sense, Wall Street’s celebration doesn’t match Main Street’s reality.

The gap between these two views of the economy may come down to timing. Investors focus on the future, while consumers are reacting to what’s happening right now. If lower interest rates and business optimism start boosting wages and jobs, confidence might catch up. But if prices stay high and layoffs continue, the divide could grow even wider. For now, it’s a tale of two economies, one soaring in the markets, the other still trying to find its footing.

https://www.msn.com/en-us/money/markets/all-four-u-s-stock-market-indexes-just-closed-at-record-highs-here-s-what-history-says-happens-next/ar-AA1PkX2n?ocid=BingNewsVerp

https://apnews.com/article/consumer-confidence-conference-board-economy-spending-d406ec7cdf046a4c365a72672fdfbb8d

Inflation rate hit 3.0% in September, lower than expected, long-awaited CPI report shows

        Inflation did not rise to what economics have projected for the month of September, with the CPI increasing by only 3% and 3% annually, less than forecasted. The reason why the CPI is important right now is because it is the only economic data allowed to be released during the government shutdown. The data showed that their was moderate price increase in food and energy, while home costs and core services remained contained. A 4.1% jump in gasoline prices was a large contributor with the overall inflation being muted, after a couple months of volatility. Along with this data stock market futures added to gains following the release, while treasury yield were slightly negative. 

        This CPI report, provides a glimpse into the state of the U.S. economy at a time where other data is suspended. All this data provides the key piece of evidence guiding the feds next move of cutting rates. This has had people concern that the persist of Trump's tariffs could cause another round of painful inflation on our economy causing issues. Overall, the softer inflation right now supports the case for continued monetary easing to sustain economic momentum. 

https://www.cnbc.com/2025/10/24/cpi-inflation-september-2025.html

Grounded Against Flight: The Workers Strike Against Boeing

 This Sunday, workers at Boeing's St. Louis Defense Center rejected the company's latest contract offer, extending a 13-week strike that has slowed the production of fighter jets and other critical defense components. The International Association of Machinists and Aerospace Workers (IAM), representing around 3,200 employees, said Boeing's proposal failed to meet workers' needs and was nearly identical to one previously rejected. The union's approved counteroffer, voted on by the workers of the union, would add roughly $50 million over the next four years. Boeing's management has stated that it will not consider this offer. 

Meanwhile, Boeing CEO Kelly Ortberg will make around $22 million this year, a point many people look to as the company resists higher compensation for its workforce. With manufacturing delays mounting, historically bad stock performance, and neither side backing down, the coming weeks will be crucial for the company. 

Tariffs on Coffee and Consumer Substitutions

https://finance.yahoo.com/news/us-coffee-prices-spike-due-203207154.html

How much are you willing to pay for coffee? To what extent can business owners continue profiting on this non-essential good in spite of tariffs? Unfortunately, tariffs on Brazil, Colombia, Vietnam have contributed to an astonishing annual 19% increase in instant coffee since September 2024. According to the article, 99% of coffee is imported to the United States. Trump commented that some "unavailable natural resources” may be exempt from the tariffs, but coffee has not been brought to discussion. 

Many manufacturing companies that are relocating to the U.S. have the ability to produce, regardless of climate. The contrary can be said about coffee bean manufactures, as the plants only thrive in a naturally warm and humid environment. Therefore, the cafe business is not as agile. Consumer prices are rising, reflected in the most recent CPI release. The CPI lacks substitution data, which could be prevalent in this situation. Consumers may substitute with other sources of caffeine, like energy drinks. Consequently, inflation data derived from the CPI may underestimate real behavioral changes in consumer spending. 

Target’s Job Cuts and the Future of Corporate Work

Target recently announced plans to cut 1,800 corporate jobs, showing how even major companies are reorganizing to stay competitive. Incoming CEO Michael Fiddelke said the company had “too many layers and overlapping work,” which slowed decisions. Target claims the cuts aren’t about saving money but about improving efficiency. But it’ll be interesting to see if that’s really the case, especially given their profit declines over the past year. After a rough 2024, this move appears aimed at rebuilding confidence and positioning the company for a stronger future.

Still, these layoffs highlight a bigger trend in today’s economy. Companies want to appear “leaner” and more tech driven, but that often means fewer people doing more work. If this push toward automation keeps growing, it could reshape not only what corporate jobs look like but also how many exist in the years ahead.

Read the article here: https://www.nytimes.com/2025/10/23/business/target-job-cuts.html

Rare earths make gains amid battle to beat China’s dominance

Rare-earth minerals are gaining increased attention as the United States steps up efforts to reduce its dependence on China’s dominance in the market for these critical resources, which are essential for technologies like electric vehicles, semiconductors, and defense systems. China currently controls a major share of global production and reserves of rare earths, prompting U.S.-listed companies in the supply chain, such as MP Materials and USA Rare Earth, to see their shares rise amid expectations of increased investment and government support. Meanwhile, China has tightened export controls, requiring foreign firms to obtain government approval for products containing Chinese-origin rare earths, further spurring U.S. and allied nations to accelerate domestic and allied-based sourcing and refining capacity. The article highlights how this shift reflects broader strategic concerns about supply chain security and technological sovereignty.

https://www.cnbc.com/2025/10/20/rare-earths-gain-amid-us-effort-to-beat-chinas-dominance.html

Wall Street and Lending Problems

 It seems Wall Street has begun to ge a little jumpy lately, and most likely for good reason. There have been a few recent lending blowups and investors believe there is more to follow. There have been some banks (Western Alliance and Zions) who are currently dealing with bad loans and the interest rates are climbing. And to add to this, banks are still dealing with hundreds of billions of lost dollars on old investments.

Private Lenders are also feeling the nerves as they have taken loans that could be risky and these rising interest rates are going to make it hard for borrowers to pay up. Unrealized losses are also at a whopping $395 billion so there is definitely fair reason for Wall Street to be nervous. There are fears that there could be more to come with these problems and it might not be over yet.

https://www.economist.com/finance-and-economics/2025/10/19/why-wall-street-is-fearful-of-more-lending-blow-ups

A soaring stock market led by tech has some likening the AI boom to the dot-com bubble

 The current surge in stock market valuations driven by enthusiasm over AI have analysts drawing  parallels between this AI boom and the late‑1990s dot‑com bubble. Tech companies with strong AI exposure are on the rise, pushing major indices to record highs. Some economists and global institutions  warn that although the AI‑investment wave may be real, the productivity gains underpinning the hype are still largely speculative. While the AI boom has rea traction, it may be carrying speculative excess, and investors should be aware of the risks of a bubble‑type event. I think think the hype is going to get ahead of the results. 

Europe’s Economy Struggles to Gain Momentum

 Europe’s economy is growing, but just barely. The European Commission expects around 1% growth in 2025 as high interest rates, weak exports, and global trade tensions slow things down. Inflation has finally dropped to about 2%, hitting the European Central Bank’s target, which is a positive sign after years of price spikes. Still, a stronger euro and new U.S. tariffs are hurting Europe’s exporters, especially in Germany and Italy. On the bright side, unemployment remains low, and wages are rising slightly. But long-term challenges like an aging population, low productivity, and the impact of climate change are weighing on the region’s future. This summer’s heat waves and droughts, for example, caused major agricultural and energy losses. Overall, Europe’s economy is stable but stuck in low gear. Inflation is under control, but growth and investment need a boost if the region wants to move from recovery to real progress.

https://economy-finance.ec.europa.eu/economic-forecast-and-surveys/economic-forecasts/spring-2025-economic-forecast-moderate-growth-amid-global-economic-uncertainty_en?utm_source=chatgpt.com

Economy Swiss government slashes growth outlook as Trump tariffs put ‘heavy burden’ on economy

Switzerland has sharply revised downward its GDP forecasts for 2025 and 2026 as supply chain pressures, export declines, and U.S. tariffs weigh heavily on the economy. The State Secretariat for Economic Affairs (SECO) now projects growth of about 1.3% in 2025 (down from earlier estimates) and 0.9–1.2% for 2026, citing that additional U.S. tariffs are placing a heavy burden on export-oriented sectors and are expected to ripple across the broader economy. Swiss exporters, especially in industries like luxury goods, machinery, and precision manufacturing, are seeing reduced demand, higher costs, and increased uncertainty. Analysts warn that continued trade tensions could push parts of the Swiss economy into recession if global demand weakens further.

https://www.cnbc.com/2025/10/16/switzerland-slashes-gdp-forecast-as-trumps-tariffs-weigh-on-economy-.html

Market crash as Tariff remarks affects investors Confidence

Yesterday's market crash was brutal. The Dow plunged 1,200 points, down 3.2% in a single session, while the S&P 500 fell 3.8% and the Nasdaq dropped a staggering 4.5%. Trading volume surged to over 12 billion shares as panicked investors rushed to exit positions after renewed concerns about the administration's tariff policy. When key officials made remarks suggesting more aggressive trade measures could be coming, traders hit the sell button fast.The uncertainty around tariffs is creating real damage. According to recent reports from CNBC, the administration's tariff threats have sent markets into turmoil. The volatility index VIX spiked 45% to reach levels not seen since early 2024. Every time there's talk of escalating trade tensions, the market reacts negatively. Companies can't plan, investors get nervous, and we all pay the price. This isn't sustainable economic policy it's chaos that's eroding confidence and wealth.We've seen this pattern before with tariff announcements causing volatility, but yesterday felt different. The speed and severity of the selloff shows how fragile investor sentiment has become. With over $1.8 trillion in market value wiped out in a single day, the message is clear: investors want stability, not trade war escalation. If policymakers don't provide clarity soon, we could be looking at a prolonged downturn

https://www.cnbctv18.com/market/us-market-crash-dow-jones-snp-500-nasdaq-trump-tariffs-china-shutdown-hostilities-19712027.htm  

The New Luxury

 The Ultra-Rich have stopped shopping - sounds silly, right? 

According to a Moody's survey, the richest 0.1% of Americans now control about 14% of the nation's wealth. Yet, they are no longer spending on luxury watches, sports cars, or gaudy mansions. There are now over 3,000 billionaires in America, up 2,800 from last year. With the sudden influx of wealth, you'd expect more trips to the Rolex store, but the opposite is happening. 

In the traditional sense, spending on art, private jets, and multi-million-dollar mansions is actually slowing down. Knight Frank's luxury investment index (which tracks how the ultra-rich spend their money) climbed more than 70% from 2015 to 2023. In 2024, that same index saw a decrease of 6%. What changed, you ask? To understand that we need to know what makes these "luxury" goods luxurious to begin with. The multi-million-dollar price tag for fine art stems from the scarcity of the good. If Rembrandts were common, no one would be willing to pay top dollar for them. Enter the "rarity premium" or the idea "that I have what others can't." The rarity premium has long defined what luxury goods are. 

The New Era: 

Instead of buying assets, the ultra-wealthy are paying for access. The Economist built an "Ultra-Luxury Services index" to illustrate this paradigm shift, which tracks things like Super-Bowl Tickets, Wimbledon seats, and dining at three-star Michelin restaurants. Since 2019, the index has risen by over 90%. With the new age of social media, it's no longer about who owns the most expensive bottle of wine, but rather who can post pictures from the hardest-to-get-to get to places. For the new era of wealth, it's no longer about possessions; it's about presence. Instead of changing watches, the new wealth is changing the status quo of what it means to be rich in America. 

U.S. Government Shutdown

    The U.S. government is now on shutdown because the Democrats and Republicans could not agree on a budget. According to the article "Federal Shutdowns Usually Don't Do Much Economic Damage. There Are Reasons to Worry About This One," this shutdown looks riskier than all the other one's and President Donald Trump is threatening to permanently eliminate thousands of government jobs. The U.S. government has been shut down 21 times in the past half century, and the last shutdown stretched about five weeks. During a shut down, Federal workers do not get paid and the federal government delays some spending. When the shut downs are over, federal workers go back to their jobs and collect back pay. Government benefit payments and healthcare programs (Social Security and Medicare) won’t be disrupted by the shutdown, which is a crucial income support for some families. However, there is little evidence that they have a significant impact on the economy since it is not for a long period of time. 

    There is an estimate that the shutdown and loss of income for federal workers could decrease the nation's annual growth rate 0.1 to 0.2% in the fourth quarter for each week the government is closed. The economy created 911,000 fewer jobs than originally reported in the year, which meant that employers added an average of fewer than 71,000 new jobs a month over that period. Since March, job creation has been slowing down even more, which shows an average of 53,000 jobs a month. The GDP growth is at a 3.8% annual pace from April through June, but drops to 0.6% in the first three months of the year. 

Press, Associated. “Federal Shutdowns Usually Don’t Do Much Economic Damage. There Are Reasons to Worry  about This One.” US News & World Report, U.S. News & World Report, 2025,   www.usnews.com/news/business/articles/2025-10-02/federal-shutdowns-usually-dont-do-much-economic-damage-there-are-reasons-to-worry-about-this-one.

The State of U.S. Trade

Right now, U.S. trade policy is shaking things at home and abroad. The government has been raising tariffs on countries like China, Canada, and Mexico, arguing it is about protecting American industries. But higher tariffs often mean higher costs for businesses and, eventually, for consumers. Even agriculture is being affected soybean farmers for example are struggling after China pulled back on imports.

At the same time, the U.S. is trying to manage relations with Europe. A new agreement with the EU capped many tariffs at 15%, which helped avoid a bigger trade war. Still, the mix of protectionism and negotiation shows how trade policy is now being used as much for politics and strategy as for economics. For Americans, these choices matter because they influence prices, jobs, and how stable global supply chains remain.

Stock futures are lower as government shutdown looms

     U.S. stock futures edged lower Tuesday night as Wall Street braced for a likely government shutdown at midnight, with Dow futures slipping 68 points and S&P 500 and Nasdaq 100 futures both down more than 0.2%. Congress will suspend around federal workers and delay critical economic data like Friday’s jobs report, which has added to investor worries about inflation, slowing hiring, and higher stock valuations. Markets ended September on a high note, with the S&P 500 gaining 7.8% in the third quarter, and history shows stocks often climb during shutdowns. After hours, Nike jumped 4% on stronger-than-expected sales, while Lithium Americas surged 34% after the U.S. government announced a 5% stake in the Canadian miner and its Thacker Pass lithium project. The stock market typically gains during a government shutdown, so it wouldnt be a bad idea to look into stocks

Stock market today: Live updates

The resilient stock market may be keeping the economy out of a recession. Why that’s a bad thing

 The stock market going up is making a lot of people feel richer, which has led them to spend more money on things like new houses, cars, and other expensive items. This extra spending is giving the economy a big boost. Reports show that consumer spending has gone up, housing sales have hit new highs, and even company profits are stronger than people expected. All of this makes the economy look stable and healthy, even though job growth has been slow and inflation is still higher than the Federal Reserve’s target. The stock market is allowing the economy to keep up and prevent falling into a recession.

The downside is that this growth isn’t really spread across everyone. Most of the stock gains are helping the richest people, since they own nearly all of the stock market. Regular people who don’t have much invested aren’t feeling the same benefits, and their confidence about the economy has actually been going down. Also the stock market is currently very expensive compared to its past values, which means it could be due for a drop. If that happens, wealthy people may pull back on their spending and the job market wouldn’t be able to pick up the slack. That’s why the economy seems strong on the surface, but it’s really fragile. If the stock market falls, the whole thing could tip into a recession.

https://www.cnbc.com/2025/09/27/wealth-effect-stock-market-recession.html 

Economy Government shutdowns usually have little economic impact. This time could be different

 Government shutdowns usually don’t hurt the economy much. Markets often bounce back, and growth tends to lose only about 0.1 percentage point of GDP per week, even in a long, 35-day shutdown. But this round could be different because there’s a public threat to make some furloughs permanent. That would hit the job market, especially in the D.C. area, and add new uncertainty. Analysts at Barclays and Nomura warn that permanent cuts would be a sharp break from past practice. NerdWallet notes that even a short gap in pay can push families into money trouble.

There’s also a data problem. If the Labor Department closes, the Bureau of Labor Statistics will delay key reports like jobs and inflation, and quality could slip. That means Social Security cost-of-living updates could be affected, and the Federal Reserve might have to lean on private data when making rate decisions. We’ve seen delays before, like in 2013, and Bank of America still expects the overall economic impact to be mild. The big risks this time are permanent job losses and a data blackout that clouds decision-making.

Source :  

https://www.cnbc.com/2025/09/29/government-shutdowns-usually-have-little-economic-impact-this-time-could-be-different.html

Federal Reserve's Recent Rate Cut: Balancing Inflation and Employment Risks

On September 17, 2025, the Federal Reserve made its first interest rate cut of the year, reducing the federal funds rate by 0.25 percentage points to a range of 4.00%–4.25%. This decision marks a shift in the Fed's approach, influenced by emerging concerns over a weakening labor market and persistent inflation.

Federal Reserve Bank of New York President John Williams emphasized that the rate cut was aimed at bolstering the job market, which has shown signs of softening. He noted that while inflation remains above the Fed's 2% target, the central bank's primary focus was to support employment without igniting runaway inflation.

Similarly, Federal Reserve Bank of Boston President Susan Collins expressed openness to further rate cuts, depending on economic data. She highlighted the need for a "modestly restrictive" policy to balance inflation control with labor market stability.

However, not all Fed officials are aligned on the path forward. Federal Reserve Governor Stephen Miran proposed a more aggressive stance, advocating for rapid and deep interest rate cuts based on assumptions about inflation and the neutral rate of interest. His approach has faced criticism for selectively interpreting economic effects and overemphasizing certain policy outcomes.

The recent rate cut reflects the Fed's cautious approach to navigating the current economic landscape. With inflation still elevated and the labor market showing signs of strain, the central bank faces the challenge of supporting employment while ensuring that inflation expectations remain anchored. As the year progresses, the Fed's decisions will continue to be closely scrutinized for signs of how it balances these competing priorities.

https://www.reuters.com/sustainability/boards-policy-regulation/feds-williams-says-cutting-rates-aimed-bolstering-job-market-2025-09-29/?utm_source=chatgpt.com

Increased Chances of Government Shutdown as Deadline Approaches

    Over the past weeks, discussion of a government shutdown has become more and more serious as time has gone. With September 30 being the last day to come to an agreement, it seems like both parties are unwilling to budge on their demands for a funding deal. 

    House Speaker, Mike Johnson, said on an interview with CNBC that Democrats "need to come to their senses and do the right thing." Referring to inability to come to a bipartisan agreement over a funding deal to keep the government in operation. 

    The Democratic party says that in order for them to agree to agree on a funding deal must include an extension of enhanced Affordable Care Act tax credits. These credits, which millions of Americans use, are set to expire at the end of 2025. Hakeem Jeffries, House Minority Leader, said on Squawk Box that "If the government shuts down, it’s their decision to do it". 

    The Republican party is acting like they are unwilling to include that at this time, but Johnson said they would be open to a conversation about the ACA at a later time. This statement came after Johnson accused the Democratic party of wanting to give undocumented immigrants federal health benefits. 

    The last time that the government shut down was during the first Trump administration in 2018-2019 that lasted 35 days. To-date it is the longest government shutdown in American history.

    It is becoming more evident that this conflict is about politics more than policy. It will be interesting to see if the government comes to an agreement to avoid a shutdown that is starting to become more imminent as the clock ticks towards midnight.

 Link to Article: https://www.cnbc.com/2025/09/30/government-shutdown-live-updates.html 

World's first nationally certified deforestation-free coffee

A groundbreaking partnership between Lavazza, the government of Ecuador, and the UNDP is making waves in the coffee world, and it’s now a finalist for the World Economic Forum’s Giving to Amplify Earth Action Awards. Together, they’ve launched the world’s first nationally certified deforestation-free coffee, creating a fully traceable supply chain that protects the Amazon while supporting over 400 smallholder farmers. Through Ecuador’s PROAmazonía program, the initiative has already restored over 15,000 hectares of land and exported 85 tons of sustainable coffee under Lavazza’s ¡Tierra! brand.

This could be a game-changer for the global coffee economy. As consumers demand more transparency and eco-conscious products, models like this one are setting a new standard for how coffee is grown and sold. Not only does it open doors for farmers in rainforest regions to access premium markets, but it also pressures larger producers to adopt more sustainable practices. With plans to expand the model to cacao, livestock, and other countries, this isn’t just about better coffee, it’s about redefining how the world does agriculture.

https://www.thenews.com.pk/latest/1347497-world-first-eco-friendly-coffee-nominated-for-award

Many Jobs at Risk in Africa as U.S. Trade Deal Expires

 The African Growth and Opportunity Act (AGOA) has been giving qualifying African nations duty-free access to U.S. markets on thousands of products since its inception in 2000 and is set to expire Tuesday. This largely threatens key export markets that have been relying heavily on the duty-free access to the U.S. markets. In countries such as Kenya and South Africa, factories in the textile and apparel sectors could be forced to cut thousands of jobs as exports become less competitive. In countries like Kenya who will be widely affected by this termination, preparation of large layoffs has already been made, and in South Africa, the tariffs alone could put an estimated 30,000 jobs at risk.

The termination of AGOA would directly affect government revenues as well as decreasing business confidence in sectors that are already small and rely heavily on exports such as Lesotho and Eswatini. The U.S. Congress is looking at a short-term one-year extension of the deal; however, the uncertainty of the situation may lead to reduced foreign investment as well as lingering economic stability in those affected by AGOA.

Past trade policy shifts have not led to many large-scale crises, however given the central role that AGOA plays in the African markets, given the prominence of exports, the loss of the deal may further weaken a previously fragile labor market

Revised GDP Data Shows 3.8% Growth but Tech Spending May be Propping it Up

Revised data from the Commerce Department puts second-quarter economic growth at 3.8%. This could potentially complicate the Fed's decisions as they tend to cut interest rates when the economy is struggling, but data shows that it actually isn't. The 3.8% increase was higher than the most recent estimate of 3.3% and is actually the strongest reading since the third quarter of 2024. It shows actually that the U.S. economy is resilient, even in the face of unemployment concerns and inflation.

The revision reflected stronger growth in consumer spending, from 1.6% to 2.5%, even with consumers seeming not too optimistic about spending. Data shows that despite their pessimism regarding spending, their willingness to spend actually hasn't changed.

Meanwhile, despite the Fed's prediction that unemployment would climb from 4.3% to 4.5%, the latest data actually doesn't support this, it instead alleviates some worries about further deterioration in the job market. This suggests that the economy is doing just fine even though there's a slowdown in employment growth.

But this doesn't actually mean the U.S. economy is in the best state as the second quarter reflects the three months ending June 30. The growth picture has changed since then. A slowing labor market combined with Trump's combination of aggressive tariffs and immigration enforcement has generated concern about little growth. Even with consumer spending remaining resilient, there's a concern that lower and middle income families are being squeezed as upper income consumers continue to spend, so the resilience in consumer spending doesn't really describe lower and middle income consumers. It also really could just be that ahead of tariff, households imported more (so consumed more) to avoid them.

With regards to concerns about the job market, the Fed cut interest rates to boost economic growth, but Thursday's positive economic data complicates the situation because there seems like there may be less of a need for lower interest rates to stimulate growth. But even this thinking could be problematic because GDP growth could be extremely uneven. 

There's concerns that tech companies' spending on AI is single-handedly propping up the economy especially because federal spending cuts and uncertainty regarding tariffs have clouded sentiment elsewhere. The problem with this though is that it makes GDP growth uneven and uncertain. Some people have even suggested that without tech-related spending, the U.S. would be in a recession this year. 

The U.S. really needs other sources of GDP growth as well.

Source: https://www.nbcnews.com/business/economy/us-gdp-second-quarter-consumers-buying-rcna233692

Shutdown would halt jobs report, key economic data amid recession fears

 If budget funding does not pass by Wednesday, the government will experience a shutdown. Economically, this news imposes a threat to the release of critical economic data. The Bureau of Labor Statistics will be closed and the release of key economic data would be delayed. Most critically, this includes the September jobs report, the Consumer Price Index, and key wage data. This would effect the operations of the Federal Reserve who rely heavily on these figures for their policy decisions. Additionally, this would more prominently effect investor sentiments and would likely lead to a shake up in the financial markets which respond more instantaneously to current news.

In the past, government shutdowns have not been the catalysts to severe economic issues like recessions; however, this shutdown poses a different threat due to the calls for mass firing of federal workers. This would make an impact as the key issue the Federal Reserve is addressing is the weakening labor market. Mass firing of government employees would lead to a compounding of this issue.

https://thehill.com/business/5526916-government-shutdown-economic-data/

The resilient stock market may be keeping the economy out of a recession. Why that's a bad thing

The significant growth we are seeing in the stock market is becoming a driver of the economy and a major support in preventing a recession. Consumer spending in the economy is largely sustained by the growth of the stock market and the "wealth effect." Most beneficiaries of this stock growth are high-income households with strong portfolios. The disparity in wealth growth among high-income households due to the stock market is creating positive sentiment for them; however, the majority of Americans feel less benefit from this growth, and their sentiment is declining. This reliance of the economy on stock market growth raises concerns among some economists, as it reveals a weak point. If the stock market were to collapse, it would directly impact consumer spending and cause it to fall. Such a rapid decline in consumer spending could lead to a recession, especially given the flat job growth recently. One concern about the stock market is that the S&P 500 is trading at a significantly high and unsustainable rate of 22.5x. Despite worries about the stability of a stock-driven economy, strong economic data supports it, including a 0.4% increase in inflation-adjusted consumer spending in August, a 3.8% annualized growth rate in second-quarter GDP, and growth in durable goods and home sales. Inflation remains above the Federal Reserve's 2% goal, but there are expectations for two more rate cuts this year. The economy's strength, driven by the stock market, is a double-edged sword, presenting risks of future rapid declines as well as the potential for continued growth this year.

https://www.cnbc.com/2025/09/27/wealth-effect-stock-market-recession.html

U.S. expands tariff dragnet to masks, syringes and robotics in sweeping import probe

         The Trump administration has initiated a trade probe under section 232 which is focused on import of industrial machinery, robotics, and medical devices. This trade probe could lead to fresh tariffs and raise costs for consumer, hospitals and manufacturers. The commerce Department began to investigate on September 2, and they will try to find out whether U.S. domestic production can meet demand of this market. The U.S relies heavily on imports from both China and Mexico for machinery with the important accounting for more than 18% and 17% of total machinery purchases in 2023. The investigation covers a broad array of goods including surgical masks, MRI machines, automated tools, welding machines and more.

    

        This announces flustered the financial markets, with shares of major medical device makers like GE Healthcare, Stryker, Intuitive Surgical, ResMed falling significantly as the investors began to worry about the price increase from the trade probe. Rick Pollach, the CEO of the American Hospital Association, said that these disruptions could have potential to disrupt with patient care. In my opinion, this move by the trump administration highlights the tension between protecting national security and risking economic disruption. I do believe that it makes since for the United States to reduce imports of goods but the negatives  of the market instability and disrupting patient care does give reason for concern.   

https://www.cnbc.com/2025/09/25/trump-tariff-threat-looms-over-robotics-and-medical-devices-section232-import-investigation.html   

Consumer confidence sinks near record lows, yet spending remains strong

    In September 2025, U.S. consumer sentiment dropped to 55.4 from 58.2 in August, marking its weakest reading in four months and reflecting growing unease about the economy. The decline was broad-based, affecting nearly all income and demographic groups, though households with higher wealth tied to stock market gains reported slightly steadier views. The University of Michigan survey showed that while near-term inflation expectations eased modestly, long-term inflation expectations inched up, highlighting persistent anxiety over rising costs. Consumers also expressed more concern about weakening job prospects and the impact of tariffs, which added to inflation worries. Despite the gloomier outlook, recent data showed consumer spending rose 0.6% in August, underscoring the tension between Americans’ actual spending behavior and their more negative feelings about the economy’s direction. Overall, the sharp downturn in sentiment signals rising fragility in confidence as inflation, labor uncertainty, and trade policy weigh on the public’s outlook. 

https://www.cnn.com/2025/09/26/economy/us-consumer-sentiment-september#openweb-convo

Farmers Facing Consequences of Trade War

Many farmers are in urgent need of financial assistance, especially soybean producers, in response to tariffs. High inflation, interest rates, and immigration policies have already created labor deficits and risen prices of fertilizer, seeds, and equipment. The world’s largest soybean buyer, China, has reverted to purchasing from Brazil- refusing to buy U.S. soybeans. To put it in perspective, nearly sixty percent of North Dakota's soybeans are routinely purchased by China. Therefore, many farming businesses have extremely restricted cash flow in absence of demand.The majority have considered selling off other produce inventory to store soybeans in hopes of a soon-to-come tariff deal.

It is necessary for our government to find a solution for this year's harvest, likely either a farmer bailout or ending the trade war. This raises an apparent issue, tariffs restrict net exports and imports. In class we learned that services is the U.S.'s greatest export, but it would be negligent to ignore the detrimental situation loyal U.S. producers are already in. Why would businesses want to move their production to U.S. soil if industries like farming are already struggling?

https://www.cnn.com/2025/09/20/politics/us-farmers-trump-tariffs-dire-consequences?iid=cnn_buildContentRecirc_end_recirc&recs_exp=up-next-article-end&tenant_id=related.en

America's Tariffs Not Hurting Chinese Trade; Thriving Instead

Since Trump's return to office, he has been looking to isolate China in the trade world. He called them America's biggest trade rival but his results have been somewhat mixed. In the process of trying to isolate China, they have retaliated with their own tariffs in other parts of the world including the EU, India, Malaysia and Vietnam. 

China has began to shift their production to ASEAN (Association of South-East Asian Nations) and this has led to exports to the U.S. to decrease. Overall trade is also up in Europe, Africa, and Southeast Asia, which is led by Belt and Road projects. Not only is it not going all so well for the U.S. but a continuing down this path could very well hurt its global position in trade. 

If you were making policies, would you focus more on protecting American industries or on cooperating with China? 

https://www.economist.com/finance-and-economics/2025/09/09/chinese-trade-is-thriving-despite-americas-attacks

National Income: Paying Work, Not Capital

 https://democracyjournal.org/magazine/29/national-income-paying-work-not-capital/

 In this article, Bruce Bartlett states that a smaller share of national income is flowing to labor, but larger shares are going to capital. The problem with this is that inequality will continue to grow and consumer demand will decrease because workers drive consumption. In order to correct this problem, Bartlett believes that a tax reform that re-balances support towards labor will help this problem. One example of re-balancing, would be to allow for more deductions for worker-related expenses. Bartlett doesn't believe that this solution will gain any traction in the current political climate. 

This article reiterates that problems with wealth inequality and the diminishing middle class. Too much income is going to the capital owners, not into increased wages. I think given the current political climate, we need more ideas to correct the problems, that may actually pass through as policy. 

Trump’s $100,000 H-1B fee sparks a global race to grab top talent

President Trump’s proclamation imposing a $100,000 fee on new H-1B visa applications between September 2025 and September 2026 represents a significant change to U.S. immigration policy. The fee applies only to first-time petitions, not renewals, and aims to reduce reliance on foreign workers while prioritizing domestic hiring, particularly in the technology sector. Critics argue that the policy could deter skilled applicants, raise labor costs, and negatively affect innovation and competitiveness, especially for smaller firms and startups that rely on international talent. Industry leaders have warned of potential profit margin squeezes and disruptions in hiring plans, while supporters say the measure will encourage companies to use visas more selectively for high-value positions. The announcement has already impacted markets, with shares of major Indian IT firms declining and U.S. tech companies reassessing their workforce strategies. Analysts predict this fee could reshape global talent flows and add complexity to corporate planning in the coming year.

https://www.cnbc.com/2025/09/22/h-1b-visa-what-trumps-100000-fee-means-for-top-global-talent-hubs.html

France’s Wealth Tax Debate

The article “Tax the Rich, French Protesters Cry, as the Wealthy Push Back on Paying More” covers the growing debate in France over a proposed wealth tax. Economist Gabriel Zucman has suggested a 2% levy on assets above €100 million, which supporters say could raise billions and address inequality. Protesters across France are demanding “fiscal justice,” while critics, including business leaders, argue the tax would hurt investment and push the wealthy to leave. The issue is especially heated because France faces a major budget crisis after years of tax cuts under President Macron that reduced government revenue.

The proposal has become both an economic and political flashpoint. Left-leaning parties see it as a solution to finance shortfalls without cutting social programs, while conservatives and business groups warn of serious downsides. Similar debates are happening across Europe, where some countries have already increased wealth taxes. The central question is whether taxing the superrich can truly deliver fairness and stability, or if it risks economic fallout.

Do you think wealth taxes are a fair way to reduce deficits, or are they more likely to backfire on growth and investment?

Read more here: https://www.nytimes.com/2025/09/18/business/france-tax-protest-gabriel-zucman-billionaires.html

Student Loan Pain and Growing Payment Burdens

One of the most pressing economic issues facing Gen Z in the U.S. is the burden of student loan repayment. With the end of pandemic-era relief, many young borrowers have seen their monthly payments jump to averages of over $500, almost double the national average for all borrowers. This has created difficult trade-offs. Many Gen Zers report delaying major life milestones such as buying homes, starting families, or investing in retirement, as student loans absorb a large share of their income.

The consequences are not just financial but also psychological. Surveys show rising stress, anxiety, and regret over borrowing decisions, with many wishing they had taken on less debt or chosen different schools. Confidence in paying off these loans is low, with only a minority believing they will fully repay under current plans.

Economically, this translates into reduced consumption and savings, which weakens Gen Z’s ability to build wealth compared to previous generations. It also shapes labor market choices, as some graduates prioritize jobs with loan repayment benefits over entrepreneurial or riskier career paths. Widespread financial strain among younger Americans impacts housing demand, credit markets, and even political debates over loan forgiveness and education reform.

https://www.newsweek.com/student-loan-update-gen-z-hit-highest-payments-2098779?utm_source=chatgpt.com

It’s not just Chinese imports. Peak season freight trade bound for U.S. slows to a crawl

U.S.-bound freight has slowed sharply during what is normally peak shipping season, with Chinese exports to the U.S. down about 27% year-over-year for three straight weeks. The usual September–October rush ahead of China’s Golden Week is absent, as early 2025 frontloading, high trade-war tariffs, and retailer overstocking have left little freight to move. Key categories like furniture, toys, electronics, machinery, and plastics are seeing steep drops, leading to blank sailings, suspended Asia–U.S. routes, and higher container rates (about $1,000 more per 40-foot container). Analysts warn that import volumes at major U.S. ports will continue to decline through year-end, putting pressure on retailers, shipping lines, and the broader supply chain.

https://www.cnbc.com/2025/09/10/china-exports-imports-trade-war-freight-shipping.html

Economic pressure could bring Russia to negotiating table, Bessent says

On September 7, 2025, U.S. Treasury Secretary Scott Bessent appeared on NBC’s Meet the Press and warned that intensified economic measures—including more sanctions and imposing secondary tariffs on nations still importing Russian oil—if executed in coordination between the U.S. and the European Union, could cause the Russian economy to implode and force President Vladimir Putin to enter peace talks with Ukraine. Bessent underscored that the Trump administration is ready to escalate pressure, but emphasized that success hinges on unified transatlantic cooperation, pointing out that they are now in a critical race between “how long the Ukrainian military can hold up versus how long the Russian economy can hold up.” He also noted that while new sanctions on Russia and China have been withheld, tariffs on exports from India—another major Russian oil buyer—have been increased.

https://www.reuters.com/world/economic-pressure-could-bring-russia-negotiating-table-bessent-says-2025-09-07/?utm_source=chatgpt.com

Auto Industry Takes $12 Billion Hit From Trade War

President Trump’s tariffs have dramatically affected the auto industry, setbacks compared to the covid pandemic and predicted to worsen. We are seeing short-term effects currently, but car makers will have to make costly supply chain adjustments to compensate for the complex ever-changing policy from our administration, which will certainly have long-term effects. Automarkers are now under pressure to localize production in the U.S. While this may reduce tariff exposure, the cost to re-locate production plants will run over billions of dollars for companies such as GM, Toyota, and Honda. These costs can be attributed to shifting production capacity, retooling factories, and localizing supply chains, even as they face declining profits. Capital that was initially allocated to growth and expansion is being re-directed to off-set policy costs and decisions.

Automakers have reported nearly $12 billion in losses so far, with Toyota alone losing $3 billion and expecting profits to drop by 44%. GM estimates its costs at $4 to 5 billion, and overall, the top global automakers are projected to see profits fall by about 25% this year, the lowest since the pandemic. These numbers show just how much tariffs are straining the industry’s bottom line.

At the same time, tariffs are speeding up a change that was already happening in the car industry. Instead of making one type of car for the whole world, companies are starting to focus more on specific demands of each geographical location. For example, electric cars are becoming very popular in China and Europe, while trucks are still the big sellers in the U.S. This means carmakers have to spend more money to build different cars in different places, which makes things less efficient. But on the flip side, some spectators think that it could help the U.S. economy by creating more jobs and keeping production closer to home. 

Source: https://www.wsj.com/business/autos/auto-industry-trump-tariff-impact-955ca0bf?gaa_at=eafs&gaa_n=ASWzDAgJ27C_WslYIZjDKpLdQ_lw5kMpXHvEmrr6PAkXoV1Fzfeh3_TcnULuTIJaKD0%3D&gaa_ts=68bf8cbe&gaa_sig=DucktEfdneGE3q79U5w0-W67pn6BmIb9QvaDckBNOHE5avRYwvwnXT-DN4JBQVb1iQeQYSB-R8HKJILc0LU-ZQ%3D%3D

Worker confidence in finding a new job hits record low in New York Fed survey

  The big takeaway from this article is that people's confidence in the job market is at a historical low. A survey from the New York Fed found that people feel there's only a 44.9% chance of finding a new job if they were to lose their current one. This is the lowest that number has been since the survey started back in 2013! It's a huge change from a few years ago during what was called the "Great Resignation," when people were quitting their jobs at a record pace. Back then, as many as 4.5 million workers a month were quitting, but that number has now dropped to 3.2 million in July, a decrease of over 5% from 2024.

 People's expectations that the unemployment rate will be higher a year from now went up to 39.1%, which is a 1.7 percentage point increase from July. The job data from August indicated that only 22,000 new jobs were created, which is way below the expected 75,000. They even revised the numbers for June, showing a loss of 13,000 jobs, which was the first monthly drop since December 2020. The overall unemployment rate went up to 4.3%, and a broader measure of unemployment that includes discouraged workers climbed to 8.1%. All of this points to a slowdown in hiring, and it has caused workers to "job-hug" their current positions. What do you think this means for the Federal Reserve and interest rates?

source : 

https://www.cnbc.com/2025/09/08/worker-confidence-in-finding-a-new-job-hits-record-low-in-new-york-fed-survey.html

The UK borrowing costs hits their highest level and adds to pressure to Reeves

    The UK government's long-term borrowing costs has reached their highest level since 1998. Interest rates on these 30-year government bonds increased to 5.72%, which is making it more expensive for the government to borrow money. There are expectations that Chancellor Rachel Reeves will increase taxes in the Budget later this year. 

    There seems to be a short-term UK government debt as of Tuesday. The UK Debt Management Office had sold a record £14bn of 10-year bonds. The pound also fell more than 1% against the dollar and sterling fell against the dollar to $1.3388, which is the lowest level against the US currency since 7 August. While in the US, 30-year Treasury bond yields rose to their highest.

    The article states that geopolitical tensions, US President Donald Trump's trade policies and the upcoming confidence vote in the French government had led to borrowing costs for governments around the globe to go up. 

    I do not know much about it but it would be interesting to see how the vote in the French government pans out because I also saw in another article that the French government is basically collapsing.

    Chancellor Rachel Reeves promises not to raise taxes such as income tax, VAT or national insurance on "working people," but raises the question of what taxes Reeves could raise in the autumn Budget? 
There is a couple options:
1.) Extending the freeze on income tax thresholds, which is due to end in 2028
                  -Referred to as a "stealth tax"
                  -Over time as salaries rise, more people are dragged into paying higher rates
2.) Reforming property taxes
 

I am interested in seeing what Chancellor Rachel Reeves decides to do. 

Edser, T. E. &. N. (2025, September 2). UK borrowing costs hit 27-year high adding to pressure on Reeves. https://www.bbc.com/news/articles/cy989njnq2wo

US Tariffs Show China's Increasing Reliance on External Markets

According to customs data, China's exports have increased 4.4% in August making this the lowest growth since February. This is missing the Reuters estimate of 5.0% by a large margin. Imports grew a shy 1.3% last month from a year ago, also missing the Reuters estimate of 3.0% by a large margin. Exports to the U.S. have dropped a vast 33% making it the largest drop in 6 months, similarly, imports from the U.S. have dropped 16% showing the lingering effects of the tariffs. Given these figures the U.S. still remains the largest trading partner with China, even with the recent lock in of 55% tariff on Chinese imports and 30% on Chinese duties on U.S. goods. 

These figures show the relationship between the two countries, highlighting China's large reliance on the U.S. as an importer of Chinese goods and inversely, the U.S. taking a large portion of China's exports, reaching values of $283 billion as of August. Considering all of the implications of the U.S. China trade dispute, China is still operating at a trade surplus of approximately $102 billion for August. This figure shows promise given it was forecasted at $99.2 billion. However, this is also a steep drop-off from June highs of $114 billion. This surplus can be attributed to China's efforts to rely on close foreign markets such as the European Union bloc, the Association of Southeast Asia, and African Markets. However, this increase in exporting to other foreign markets have yet to offset the steep drop-off from exports to the U.S. This push to go abroad has been ongoing for China has had relatively slow domestic markets that have been nudged by these U.S. tariffs. The policymakers of Beijing try to steer clear of sweeping stimuli such as excessive price-cutting shown in their "anti-involution" policies and have tried to rely on targeted credit and monetary measures. I am interested to see if China begins to rely a lot less on the U.S long term or if these trade disputes will reach an end soon and we will see a surge of Chinese exports to the U.S.

https://www.cnbc.com/2025/09/08/china-exports-growth-in-august-drops-missing-expectations-.html

Job openings data falls to levels rarely seen since pandemic

     The job openings in the U.S. has dropped to levels that we have not seen since covid-19 calling for fears in the labor market. The job openings and labor turnover showed reports of around 7.18 million listings in July, which has not been less than 7.2 million since the end of 2020. Economists expected it to be around 7.4 million which is a notable amount different from what it can to be. They now see this decline as a big turning point,  and is yet another data point underscoring how the job market is frozen making it difficult for anyone to get a job. Weekly jobless claims data will give us a better grasp on how bad this has already been affected everyone.  

    While people could view this as just a temporary fluctuation, I feel like this could be an early warning of a much deeper challenge with the future job market. Less openings will cause workers to face tougher competition and a lot less leverage when it would come to getting better pay or benefits. Whether this trend steady's go down or up, it'll be very interesting to see the affect it has on the job marker. I believe this will have a huge affect on college graduates with looking for jobs cause they'll have to compete with much more experienced workers. 

https://www.cnbc.com/2025/09/03/job-opening-data-falls-to-levels-rarely-seen-since-pandemic.html

Tariffs and Rising Rates Put the Brakes on Job Creation

  In the U.S, employers had 7.2 million job openings in July. Comparatively, that is down from the 7.4 million reported in June and also is the lowest since September of 2024. Rising interest rates and tariffs have seem to lessen the creation of jobs in the U.S. A report from the Job Openings and Labor Turnover Survey showed the hiring of jobs has been slow and difficult all summer; partially due to the fact of Trump's new interest rates, import and export prices, etc. Regardless of the job opening slowdown, most business in the U.S. did a great job of evading a mass firings.

What could come next is the FED is now trying find a way to boost the job market by taking interest rates in September and cutting them. Key interest rates from the FED have kept borrowing costs somewhat high on all sorts of loans which has cooled down the creation of jobs and the economy. I am interested to see where this goes in the coming weeks and maybe years, obvisouly I am hoping to leave college and have job opportunities readily available. It is not encouraging to hear that jobs may not be the easiest get in this country in the current moment. Is it an exaggeration? Maybe, but I am interested to see how this all pans out with job openings, the FED, and tariffs. 

https://finance.yahoo.com/news/labor-market-lost-steam-tariffs-151626842.html

Did Trump Overstep Powers with Tariffs?

    The Supreme Court of the United States is currently viewing an appeal that was submitted by the Trump administration on September 3. The Trump administration reasoned that America would become a "poor nation" without the tariffs. It has been reported by the Department of Homeland Security reported that the reciprocal tariffs that first started going into place in April 2025 have totaled to $81.5 billion. 

    Treasury Secretary, Scott Bessent, said on "Meet the Press" that if the Supreme Court rules that Trump is overstepping his presidential powers in these tariffs that "about half the tariffs" would be refunded back to the people. Bessent is confident that that the Trump administration will win at the Supreme Court. Bessent also made clear that there are also many other options and "other legal authorities" to continue to implement tariffs even if Trump does not win this case. 

    The impact of these tariffs are starting to reveal themselves. Job openings are currently fewer than unemployed people and the unemployment rate is the highest it has been in the past four years at 4.3%. The goods sector has also taken a rough hit. Economist Joe Brusuelas said that Goods businesses have posted four straight months of declines since May. Earlier this year, major companies like Nike, Walmart and Hasbro warned that these tariffs would lead to price hikes.

It will be interesting to see what the SCOTUS rules and whether there will be refunds on Trump's extremely controversial tariffs.

Link to Article: https://www.cnn.com/2025/09/07/business/tariff-rebate-supreme-court-bessent

As Trump berates Goldman, other economists agree that higher tariff inflation is coming

 Trump argued with Goldman Sachs after they said his tariffs are making prices go up and creating inflation. But the latest numbers from the government show prices are rising anyway. In July, inflation went over 3% for the first time in months. Goldman says this is happening because companies are starting to raise prices to cover the higher tariff costs. That means the things we buy every day, like clothes, food, or electronics, are starting to cost more and this could continue if tariffs stay in place.

Other big banks like UBS, JPMorgan, and Oxford Economics, also say the same thing. They believe tariffs are already pushing up prices and could keep rising through the rest of the year. Some think inflation could reach almost 4% by the end of 2025, which is much higher than the 2.4% it might have been without tariffs. This means bills could keep getting more expensive and leave people with less money to spend on other things. The Federal Reserve is still expected to cut interest rates later this year because the job market is weakening, and some believe inflation from tariffs won’t last forever. Still higher prices could slow the economy and hurt consumers. 

https://www.cnbc.com/2025/08/13/as-trump-berates-goldman-other-economists-agree-that-higher-tariff-inflation-is-coming.html

Job openings data falls to levels rarely seen since pandemic

    U.S. job openings have fallen to their lowest levels since the pandemic, signaling a significant cooling in the labor market. According to the latest JOLTS data, there were about 7.18 million openings in July 2025, down from 7.36 million in June and well below the post-pandemic peak of 12.1 million in 2022. This decline has been especially sharp in healthcare, social assistance, and retail sectors that normally drive job growth. 

    The slowdown reflects cautious hiring rather than mass layoffs, as companies hold off on expanding economic uncertainty, tariffs, and monetary policy shifts. While this offers some relief to the Federal Reserve in its effort to cool inflation, it poses challenges for job seekers who now face a tighter market. Employers may benefit from a larger pool of applicants, but the broader trend points to a softer labor market and the possibility of interest rate cuts if conditions weaken further. 

Job openings data falls to levels rarely seen since pandemic

Thanks to the AI data center boom, it’s a good time to be an electrician

 Despite the concern of artificial intelligence advancement replacing jobs, the construction of AI data centers is boosting the demand for electricians and other skilled laborers. 45% to 75% of the build-out of data centers is electrical and installation of new equipment requires electricians as well. Additionally, AI data centers require around the clock electrical work. Due to the increased demand for data centers to support the prolific research and development of AI, reports suggest that 81,000 electrician jobs will need to be filled annually over the next decade.

Here, we see the positive effects the AI advancement age is having on the US economy. The surging demand and race to capitalize on AI is boosting other sectors of the labor market. Electricians, especially, will see not only a rise in employment and salary opportunities but can be optimistic of the sustained need for their profession as much of the opportunities come from regular maintenance. Another positive signaling effect of this labor growth is major companies like Google and Microsoft are donating millions of dollars to unions and electrician training programs.

https://finance.yahoo.com/news/thanks-to-the-ai-data-center-boom-its-a-good-time-to-be-an-electrician-133026522.html

Labor Market Cools as Job Openings Hit Rare Lows Post-Pandemic

 On Wednesday, September 3rd, the Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Survey (JOLTS), raising concern amongst economists about the strength of the U.S. labor market. The report showed 7.18 million job openings in July, one the second reading below the 7.2 million mark since the end of 2020 and the COVID-19 era. 

This latest released marked the lowest level of job openings since September 2024, when listings stood just above 7.1 million. Besides the temporary dip in 2024, job openings have not fallen to this level since the early months of the pandemic when the economy was largely impacted by widespread shutdowns. Economists polled by Dow Jones expected around 7.r million openings, making this shortfall even more notable and suggesting growing weakness within the labor markets. Heather Long, chief economist at Navy Federal Credit Union, described the situation bluntly: "This is yet another data point underscoring how this job market is frozen and it's difficult for anyone to get a job right now."

Going beyond the economic implications, the report carries significant political weight. The recent firing of former BLS Commissioner Erika McEntarfer over concerns about inaccurate job reporting has placed the agency under fire. With job openings now at their lowest point in several years, the current administration will be forced to respond. The question is how President Trump will address these numbers, and what policies he will introduce in hopes of stabilizing the labor market. This could be a turning point or a breaking point for this administration as they implement policies to combat the weaking labor market. 

Job openings data falls to levels rarely seen since pandemic

Bessent Predicts Strong Economic Growth by the End of the Year

    Treasury Secretary Scott Bessent expressed optimism for the U.S. economy despite a period of weak job growth and rising unemployment. He predicted that the economy would accelerate by the fourth quarter, citing the administration’s pro-business policies, including the One Big Beautiful Bill Act, as key drivers for future growth. Bessent emphasized that businesses are planning to increase capital expenditures and hire more workers, suggesting that these investments will strengthen sectors such as construction and manufacturing.

    The economic context presents significant challenges. Job growth has been slow, with only 22,000 positions added in August and an unemployment rate of 4.3 percent. Manufacturing companies like John Deere have laid off employees due to the impact of tariffs, while consumers are facing rising prices. Democrats have criticized the administration for its handling of the economy, while some Republicans have focused on Federal Reserve policies as a source of concern. Bessent dismissed the idea that tariffs are harming the economy, framing them instead as beneficial for certain businesses, but overall data suggest that achieving these optimistic projections may require overcoming persistent economic obstacles. 

https://www.politico.com/news/2025/09/07/bessent-predicts-substantial-accelaration-economy-00549806

Payrolls Rose 22,000, Sign of Hiring Slowdown

 With the end of August came the release of the Nonfarm payroll statistics.  The release showed an increase of only 22,000 in the payroll, indicating that the downward trend in job creation is continuing.  The previous couple of months have demonstrated weak job creation growth, with July showing a decline of 13,000 jobs.  This is a concern for the government as it examines the market, as it indicates that the labor market is weakening.  Many people believe that these indices will be a major driver in the Fed's decision to cut rates in its next release on September 17th.  Overall, the data surveys indicate that the healthcare sector is leading the way in job creation in the job market.  The Bureau of Labor Statistics will release its revised statistics this Tuesday after conducting further surveys, but there is little hope of seeing an increase in the numbers.

Although the job creation statistics do not indicate a strong job market, the unemployment statistics are showing some signs of improvement.  The overall unemployment rates did see an increase; however, this incline is likely a result of growth in the labor force.  With the latest release of labor statistics, the labor force grew by 436,000.  Along with the increase in the labor force, there was growth in the U.S. wage values.  The hourly wage has seen a rise, although it remains slightly behind the projected values for the year's growth goals.  It is also a good sign that the stock markets were not hindered by the job creation statistics upon their release by the Bureau of Labor Statistics.  The stock market opened high, indicating that the market did not have extreme concerns about the released data.  Overall, the data being released continues to support the belief that the Fed will cut rates and indicates that some change is needed to support the weakening job market.

https://www.cnbc.com/2025/09/05/jobs-report-august-2025.html

Former Federal Reserve Governor, Adriana Kugler resigns abruptly

Former Federal Reserve Governor, Adriana Kugler abruptly resigned from the Board on August 1st 2025 even though her term was not set to expire till January 2026.

Kugler has refused to give a reason for stepping down and has also decided not to comment further to media which has fueled speculation and confusion. The Federal Reserve commented that Kugler would be returning to Georgetown University as a professor in the fall, but her faculty page doesn't show her teaching any courses, and hasn't been updated since she became governor of the Federal Reserve Board, and Georgetown University has also refused to put out a statement about Kugler's status with the university. 

There's speculation on whether she might have been pressured to step down, especially because other Fed board members are under political scrutiny. NBC notes that "inconsistent real estate records have become a type of ammunition that the Trump administration has used to target its political enemies, often citing the records to publicly accuse people of having committed 'fraud'." These allegations have been extended to Lisa Cook, the Former Fed governor who had a campaign launched against her for committing 'mortgage fraud', and other political figures like New York Attorney General Letitia James and Democratic California Sen. Adam Schiff (who are two of Trump's legal antagonists) who have also been accused of mortgage irregularities. While real estate records related to Kugler also show discrepancies regarding her primary residence, nothing shady seems to be going on there.

Kugler's resignation provided Donald Trump with the opportunity to choose a successor to fill her seat till the end of her term, and he chose Stephen Miran, the White House advisor. With this addition to the board, Trump now has nominated three of the seven members on the board, which gets him closer to his goal of 'dominating' the central bank. 

Seating Miran on the Fed Board is a victory for Trump who has been battling for months with the Federal Reserve Chairman Jerome Powell for control and to drop the interest rates. The Trump administration have accused Powell of deliberately holding back U.S. economic growth, and Trump says he should have lowered interest rates a long time ago.

Trump finalized Japan trade deal with 15% tariffs as Ishiba faces discontent from within party

On September 4, 2025, U.S. President Donald Trump signed an executive order implementing a new trade deal with Japan that lowers tariffs on Japanese automobiles from 27.5% to 15%, effective retroactively from August 7, and prevents double taxation on goods already above that threshold, while exempting commercial aircraft. In return, Japan pledged $550 billion in U.S. investments spanning semiconductors, pharmaceuticals, energy, metals, and shipbuilding, alongside increased purchases of American agricultural and defense products, including an order of 100 Boeing planes. Japanese Prime Minister Shigeru Ishiba praised the agreement as a diplomatic breakthrough that clears uncertainty for key industries and invited Trump to visit Japan, stressing a shift from tariffs to investment-based relations. Yet Ishiba’s leadership is under pressure at home, as internal dissatisfaction within the Liberal Democratic Party and recent electoral setbacks could trigger a party leadership challenge as early as Monday, leaving his political future uncertain.

https://www.cnbc.com/2025/09/05/trum-japan-trade-deal-tariffs-ishiba-ldp-party.html

Retirees and the Fed

At the Federal Reserve’s annual meeting in Jackson Hole last week, Chair Jerome Powell suggested that interest rate cuts may be coming soon. This announcement made the stock market jump, but it was worrying news for retirees. As Brett Arends explained in MarketWatch (Aug. 22, 2025), retirees came away worse off because of three things: the chance of lower interest rates, higher inflation caused by tariffs, and signs that the Federal Reserve may be giving in to political pressure.

For retirees who depend on savings accounts, CDs, and bonds, lower interest rates mean less money earned on their investments. That leaves them with less income to cover everyday expenses. At the same time, inflation is still higher than the Fed’s two percent goal. Prices have been rising by about 2.7 percent overall and 2.9 percent when food and energy are excluded. This makes life more expensive, which is especially hard for people on fixed incomes.

Another major concern is the independence of the Federal Reserve. Powell avoided defending his colleagues and appeared open to rate cuts even though there was little economic reason to promise them. This raised fears that the Fed may be bending to political pressure. History shows why this matters. In the 1960s and 1970s, when the Fed followed politics too closely, inflation got out of control. It was only when an independent Fed, under Paul Volcker in the 1980s, took tough steps that inflation came back down.

In the end, Powell’s remarks gave retirees little to feel good about. They now face lower income from their savings while also dealing with rising prices. The stock market may like the idea of lower interest rates, but for people living on fixed incomes, it creates real financial strain.

https://www.marketwatch.com/story/retirees-the-news-from-jackson-hole-is-ominous-for-you-9ca906f0?utm_source=chatgpt.com