“The adverse effects of the Trump administration’s trade and migration policies on US economic activity are emerging, as they were reflected in the July Employment Situation report and the economy as a whole is exhibiting further signs of a clear loss of momentum. Meanwhile, the trade agreements recently signed should ease the uncertainty shock. Finally, the rebalancing of risks associated with increased fears about employment could challenge the Fed’s wait-and-see stance. Job growth plummets. Concerns about the negative impact of the Trump administration’s protectionist turn on the US economy, which have long been limited to survey data, materialised in July’s Employment situation. Nonfarm payrolls (NFPs) came in well below expectations (73k, consensus: 106k) and, most notably, were accompanied by substantial downward revisions to May and June data, totalling
-258k. As a result, the 3-month moving average dropped to just +35k, its lowest level since 20101. The immediate damaging effects of the administration’s tariff offensive on activity can be seen in the sharp drop in hiring in May (19k) and June (14k), before July’s partial rebound possibly linked to the de-escalation.”
MWL
