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

Tourism Sector on Track for Record-Breaking Economic Impact

 Kenya’s tourism industry is poised for a historic year in 2025, with the World Travel & Tourism Council (WTTC) projecting a contribution of KSh 1.2 trillion to the economy. This figure is not only 24% higher than pre-pandemic levels but also represents more than 7% of Kenya’s GDP, making tourism a pillar of national growth alongside agriculture and manufacturing. The sector’s impact is wide-reaching, supporting an estimated 1.7 million jobs. These roles stretch far beyond hotels and safari guides, extending into agriculture, transportation, and handicrafts. Tourism’s employment multiplier effect is crucial in a country where job creation remains one of the government’s top priorities.

Spending patterns underscore the sector’s dual strength. Domestic tourists are expected to spend nearly KSh 560 billion, reflecting the growth of Kenya’s middle class and a renewed interest in local destinations. Meanwhile, international visitor spending is projected at over KSh 300 billion, up 31% from 2019, fueled by relaxed visa rules and aggressive global marketing. Tourism Minister Rebecca Miano has set ambitious revenue targets of KSh 650 billion (approx. US$5 billion) for 2025, up sharply from KSh 452 billion in 2024. Much of this growth will come from diversification into coastal, cultural, and conference tourism, reducing reliance on the traditional safari product.

Social media influence over Gen Z investment rates

    Retail investing among Gen Z has surged dramatically over the past decade, with 25-year-old participation jumping from just 6% in 2015 to 37% in 2024, according to JPMorgan. This spike was especially pronounced during the pandemic, when social media exposure and accessible mobile trading platforms led many young people, especially men, into the markets. Male participation in investment rose from 20% to 30%, widening the gender gap, while female participation remained flat at about 35% of retail investors overall. JPMorgan researchers emphasized that while the pandemic may have created a temporary cohort effect, the new baseline for Gen Z investment participation is likely to remain well above pre-2020 levels.

    The study also highlighted positive shifts in income-based access to investing. Individuals from below-median income groups represented about 20% of investors in 2014, but their share rose to 31% by May 2025, the highest outside of periods affected by direct stimulus payments. Despite these improvements, significant gaps persist, both in income and gender. The authors talked about the need for targeted financial education, noting that new investors are increasingly vulnerable to risks like tax surprises during bull markets and emotional reactions to losses during downturns. As more first-time investors enter the financial system, JPMorgan suggests financial advisors may need to evolve their roles to support these shifting dynamics.

https://www.aol.com/gen-z-six-times-more-100858510.html

French Risk Gauge Hits Seven-Month High as Political Fears Grow

    For the first time in more than ten years, the yield differential between French and German 10-year government bonds has increased to 80 basis points. As the government struggles to pass a €44 billion austerity package amid parliamentary turmoil, the move shows growing investor apprehension about France's political risks and economic situation. French bonds are being sold off, which is raising yields in comparison to Germany's, even if German bunds continue to be the Eurozone's standard safe haven. Analysts caution that if rating agencies downgrade France or if domestic political tensions increase, the difference may continue or perhaps worsen. The French-German yield spread's dramatic increase reflects differing opinions on the Eurozone's political stability and fiscal credibility. While France's difficulties raise questions about the sustainability of its debt and the possible transfer of political risk into financial markets, Germany's tenacity highlights its position as the fulcrum of investor confidence. By eroding fiscal unity and raising borrowing costs for weaker nations, this difference might erode Eurozone cohesiveness if left unchecked. While authorities confront the pressing task of reestablishing market confidence in France's fiscal trajectory, investors interpret the trend as a shift toward German assets as a haven. 

https://www.bloomberg.com/news/articles/2025-08-27/french-german-10-year-yield-spread-climbs-to-80-basis-points?embedded-checkout=true

Will AI Spending Keep Propping Up the Economy?

The article “The A.I. Spending Frenzy Is Propping Up the Real Economy, Too” from The New York Times explains how huge investments in AI are not only raising tech stock prices but are also helping the U.S. economy grow. In 2025, companies worldwide are expected to spend $375 billion on AI infrastructure like data centers and computer equipment, and next year that number is set to rise to $500 billion. Investment in software and computer equipment alone (not counting data center buildings) made up about a quarter of all economic growth in the U.S. last quarter, according to Commerce Department figures. This increase in spending is leading to lots of new construction jobs for electricians, engineers, and equipment operators, even as other parts of the real estate market slow down.

Although there’s excitement and optimism, experts warn that there are risks because many AI projects aren’t yet profitable. Still, the strong growth continues to drive business activity and employment in the sector, with even more spending planned for next year. It will be interesting to see whether this increased investment will keep the economy growing, or if there will be challenges like those seen in earlier tech booms.

Read more here; https://www.nytimes.com/2025/08/27/business/economy/ai-investment-economic-growth.html

German Economy Shrunk by 0.3% in Second Quarter

 

    Germany's economy has shrunk by 0.3%, which is significantly worse than initially reported. To find this data, they compared their results with the previous 3 month period. The Federal Statistical Office said that the GDP contracted by 0.1% in April to June, and found this data by comparing it with the 1st quarter for Europe's biggest economy (2025).

    The data also showed that the manufacturing and construction industry had also worsen, and the household spending was revised down in the quarter. These results were shown after a 0.3% growth (2025). 

    Since the German economy has been shrinking for the past two year, it's been Chancellor Friedrich Merz's top priority since taking office and has launched a program to encourage investing. He plans to set up a $582 billion-euro fund to pour money back into Germany's infrastructures over the next 12 years. Companies have pledged to invest at least 631 billion-euros in Germany over the next three years (2025). 

    Economist Carsten Brzeski stated that the surge in economic activity is the result from the U.S. front-loading of German exports in the first quarter, while the economy experienced a reversal of this front-loading effect. The U.S. tariffs took effect second quarter and this was the first full-blown impact of the tariffs (2025).  

    I need to further my research on the tariffs that are being placed, but it seems like the U.S. is doing a lot of harm on other countries economies. I think the U.S. should become more aware of how these policies are effecting other countries as well as how they are effecting the U.S. 

    I am also curious about how many companies are contributing to the 631 billion-euro investment in the next three years. Will small businesses be apart of this later on?

    German Economy Shrank by 0.3% in Second Quarter in Worse Showing than Initially Thought, AP News. (2025, August 22). AP News. https://apnews.com/article/germany-economy-gdp-shrank-second-quarter-ed5a0ca6732d3cf92828e045144defc2

Trumps tariff plan on the movie industry

President Trump’s plan to implement a 100% tariff on foreign made movies might seem like it’s helping Hollywood, but it could actually mess with the economy and global film industry. The idea is to bring more production back to the U.S., but in reality, it risks damaging long-standing international partnerships and could raise costs for both studios and moviegoers. Smaller studios that rely on foreign collaboration might take a big hit and viewers could end up with fewer movie choices. There’s also the chance that other countries could hit back with their own tariffs, which would make things even worse. Even people in the industry are saying this move could do more harm than good in the long run.

https://www.cnn.com/2025/05/05/media/movie-tariffs-trump-hollywood 

https://www.cnn.com/2025/05/06/business/trump-movie-tariff-threat-nightcap?iid=cnn_buildContentRecirc_end_recirc 

Wobbling economy will push the Fed to cut interest rates later this year, CNBC survey finds

     A CNBC survey sent out to 31 fund managers, analysts, and economists, finds that there is still an expectation among experts that interest rates will get cut before the end of the year. Something interesting to note is that from the March to the April survey, there was a 21% jump (44% to 65%) in those who believe that an interest rate cut is happening. This prediction seems to come from the fact that stagflation is a revenant continuously coming back to haunt the Federal Chair Jerome Powell. It seems that if it comes down to choosing between continued inflation and unemployment rates, experts think that the Fed will favor the unemployment rates. Another interesting wrinkle in this dilemma is that some are of the opinion that inflation could become unanchored after a rate cut. Richard Bernstein, of Richard Bernstein Advisors, stated that cutting rates would mean the Fed is “giving up on the 2% inflation target, perhaps permanently.” Finally, lasting effects of the current administration's actions are certainly feared, as 83% of respondents believe that the U.S.'s brand has been damaged. Something like that will not be the easiest to fix on an international stage.

https://www.cnbc.com/2025/05/06/wobbling-economy-will-push-the-fed-to-cut-interest-rates-later-this-year-cnbc-survey-finds.html

April US payrolls growth slows before full tariff impact felt

This article breaks down how job growth in April had slowed down. There were 177,000 less jobs added than in March but it was still better than expected. The unemployment rate stayed at 4.2%, so the job market’s holding steady for now. But the real concern is what’s supposed to be coming next. With Trump’s proposed tariffs still in place a lot of businesses are going to be forced to have to less hiring and less investment across the board. Right now though things don’t look too bad but you can definitely feel the uncertainty. The Fed isn’t changing interest rates yet, but if inflation or the job market shifts, that could change too. It feels like we’re in this calm before the storm, and how the tariff situation plays out could really tip the balance either way. 

https://www.reuters.com/world/us/view-april-us-payrolls-growth-slows-before-full-tariff-impact-felt-2025-05-02/

GDP Pulls Back 1st time in 3 years

 The US economy hit a surprising snag at the start of 2025, contracting for the first time in three years with a GDP decline of 0.3% in the first quarter. This drop was unexpected, especially since economists had predicted a slight decrease of only 0.2%. A significant contributor to this downturn was a staggering 41.3% surge in imports, as businesses rushed to stock up before anticipated tariffs from the Trump administration kicked in. While this abrupt shift in trade dynamics weighed heavily on GDP, some positive signs emerged in consumer demand, with domestic sales growing at a steady 3% and the core Personal Consumption Expenditures (PCE) index rising by 3.5%.

Despite the contraction, experts like Ryan Sweet from Oxford Economics remind us that this doesn’t necessarily signal a recession. Instead, it reflects the complexities of a shifting economic landscape. The increased tariffs and rising prices could pose challenges in the coming months, but the resilience of consumer spending offers a glimmer of hope. Investors reacted to the news with some concern, as stock markets dipped in response to the weaker economic indicators. As we navigate the rest of 2025, keeping an eye on these developments will be crucial for understanding how the economy adapts to these pressures

Source: https://finance.yahoo.com/news/us-economy-contracts-at-03-rate-in-q1-first-gdp-pullback-in-3-years-123544859.html

Foreign Aid or Strategic Investment?

Today, something pretty major happened on the global stage, Ukraine signed a new agreement with the U.S. that’s going to shape the future of both countries for the next decade. It’s being called the United States–Ukraine Reconstruction Investment Fund.

Here’s the basic idea: in exchange for continued U.S. support in Ukraine’s war with Russia, the U.S. now gets access to a long list of rare and valuable materials from Ukraine, including titanium, lithium, uranium, and more. These are crucial for everything from aircraft to electric vehicles to nuclear power. The deal comes as part of a broader effort by the Trump administration to frame future U.S. foreign policy around economic return rather than just ideological alignment.

Ukrainian Economy Minister Yulia Svyrydenko flew to D.C. to finalize the agreement, which both countries are saying reflects an equal partnership. Both will contribute financially, and Ukraine still decides where and how the minerals are extracted. Unlike earlier drafts, this version also doesn’t conflict with Ukraine’s path to EU membership, something that's really important for Kyiv’s long-term vision.

But while this might sound like a win-win, there are a lot of complicated questions underneath the surface. For example:

• Is it fair to tie military aid and wartime support to resource access?

• Can a country in the middle of war really negotiate as an equal partner?

• Is this a smart strategy for rebuilding Ukraine, or a new kind of 21st-century imperialism?

The Trump administration is calling it a sign of “long-term peace and prosperity,” but critics are already pointing out how transactional it feels. It’s a classic example of power politics helping Ukraine, sure, but with something very tangible expected in return.

This raises big questions about how we as a country define aid versus investment, and whether national interest should always come first in foreign policy. I wonder what this means for the future of energy, war recovery, and diplomacy.

Link: https://www.foxnews.com/politics/ukraine-signs-deal-give-us-access-rare-minerals

How AI Could Shape Our Economy — For Better or Worse

Artificial intelligence (AI) is moving fast, and while it’s easy to get swept up in the excitement, experts say we should approach it with both hope and caution. If guided well, AI has the power to boost productivity, narrow income gaps, and give small businesses a leg up. But without the right policies in place, it could deepen inequality, slow economic progress, and put even more power in the hands of giant tech companies.

Productivity Growth

AI has the potential to transform how we work, helping people focus on creative and meaningful tasks instead of routine ones. Done right, it could spark new discoveries in fields like medicine and science. But if companies fail to use it well—or if legal and regulatory roadblocks slow things down—we might end up with lots of cool gadgets but little real economic progress.

Income Inequality

AI could go either way here. On one hand, it might replace many middle- and high-skill jobs, leaving workers stuck in low-paying service roles. On the other, it could help less-experienced workers perform better and close wage gaps, as seen in recent studies where AI tools boosted productivity and job satisfaction for customer service reps.

Industrial Concentration

Right now, only the biggest companies can afford to develop cutting-edge AI, raising concerns about market dominance. But the rise of open-source AI could change that, giving smaller firms access to powerful tools and helping spread innovation more widely.

The key message is that none of these outcomes are set in stone. What happens next depends on the choices we make today. Policymakers, businesses, and everyday people all have a role to play in making sure AI benefits as many people as possible. Instead of just asking whether we should speed up or slow down AI, we should be asking: how can we shape it to serve the public good?

With smart policies and forward-thinking leadership, AI can help build a future of both progress and fairness. But if left to its own devices, it may take us down a much rougher road.

https://www.imf.org/en/Publications/fandd/issues/2023/12/Macroeconomics-of-artificial-intelligence-Brynjolfsson-Unger

Trade War Drops Consumer Confidence to a New Low

Recent economic uncertainty, fueled by escalating trade tensions, has sent consumer confidence tumbling to lows not seen since the peak of the COVID-19 pandemic. As tariffs and retaliatory measures churn global markets, households are getting hit the hardest, as uncertainty hangs over spending and investment decisions.

Its knock-on impacts are clear: higher prices on commodities, disruption to supply chains, and fear of labor market volatility have made consumers wary. Unlike the pandemic-led downturn that was driven by health crises and lockdowns, this one is policy-led, driven by trade hostilities. The shift has triggered debates around the length of economic pressure and whether policymakers possess sufficient levers to stabilize markets prior to further decline in sentiments.

In spite of all of these headwinds, there continue to be a few sectors that are resilient, due to domestic demand, which is a silver lining. But without a clear trade-off, consumer confidence may keep eroding, placing broader economic recovery in the balance. At this time, both businesses and households are preparing for a bumpy ride. As we know from class, these are clear-cut signs of a potential recession. When consumers cut back on costs, it causes a ripple effect, which causes firms to do the same.

 Domestic firms, less exposed to imports, are experiencing firm demand, with some turning to domestic suppliers in a bid to avoid tariffs. Nonetheless, such advances might not prove sufficient to offset the wider issue. In the absence of diplomatic breakthroughs or policy shifts to dial back trade tensions, consumer sentiment could deteriorate further, endangering a nascent upturn. For the time being, households and businesses are tightening their belts.

https://www.pbs.org/newshour/nation/as-trade-war-stokes-anxiety-consumer-confidence-plummets-to-covid-era-lows

GOP’s Student Loan Overhaul: A Step Toward Reform or a Step Back for Borrowers?

GOP’s Student Loan Overhaul: A Step Toward Reform or a Step Back for Borrowers?

On April 29, 2025, House Republicans unveiled a sweeping student loan reform proposal aimed at simplifying repayment options, imposing new borrowing caps, and tightening eligibility for financial aid—all set to take effect by July 1, 2026. The legislation represents a bold effort to address the nation’s $1.74 trillion student debt crisis, but it raises critical questions about access to higher education, affordability, and long-term impact.

Key Takeaways:

1. Simplified Repayment Plans:
   The bill consolidates the current four income-driven repayment plans into just two: a standard fixed repayment plan and a Repayment Assistance Plan, which offers loan forgiveness after 30 years of consistent payments. While this simplification might reduce borrower confusion, it eliminates important deferment protections, like for unemployment and economic hardship, potentially leaving borrowers vulnerable during financial downturns.
2. Capping Borrowing Limits:
   Undergraduates would be capped at $50,000 in federal loans, while graduate students could borrow up to $100,000. While this aims to limit total student debt, it could restrict access to higher education for students pursuing degrees in fields with high tuition costs, such as medicine or law.
3. Changes to Pell Grant Eligibility:
   The proposal expands Pell Grant eligibility to short-term training programs and raises the threshold for full eligibility to 30 credit hours per semester. However, it also tightens restrictions, penalizing part-time students who do not meet the 15-credit hour requirement, potentially reducing their awards by up to $1,479. This could leave some students, especially those working or managing family responsibilities, without the full support they need.
4. Increased Accountability for Colleges:
   The bill holds colleges financially accountable for students who default on their loans, which could encourage institutions to improve graduation rates and post-graduation outcomes. However, the proposal also rolls back consumer protection rules like the gainful-employment and 90/10 rules, potentially allowing for-profit institutions to operate with less oversight and greater risk to borrowers.

What Does This Mean for the Future?

While the GOP’s proposal aims to reduce the federal budget impact and simplify loan repayment, it could create significant barriers for some students. The cap on borrowing could particularly affect students in high-cost fields, and the reduction in Pell Grant awards for part-time students may discourage non-traditional learners from pursuing higher education. Furthermore, removing deferments could lead to additional financial strain during tough economic times.

Moving forward, policymakers should prioritize understanding how these changes will affect low-income and non-traditional students. The reform’s goal of reducing debt should be balanced with maintaining access to education for all, particularly vulnerable groups. Colleges must also be held accountable—not just financially, but in terms of ensuring their programs lead to meaningful employment outcomes.

In Conclusion:

While the GOP’s student loan overhaul seeks to simplify the system and reduce government spending, it risks doing so at the expense of students who may face higher financial barriers. The future of this proposal depends on whether the system can be adjusted to ensure equitable access, protection for borrowers, and meaningful educational outcomes.

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