In 2025, the job market slowed. Unemployment went up a bit, hiring cooled, and factory jobs fell. Surveys showed people were more worried about losing work, and the Fed cut interest rates because growth was weakening. New tariffs raised prices on many imports, which pushed costs higher for families and businesses and hurt growth. At the same time, immigration crackdowns reduced the number of workers available, which also held back hiring. A federal hiring freeze and a government shutdown cut government jobs and slowed the economy more. Business surveys pointed to weak demand and lower confidence, especially in manufacturing and small firms. Overall, once Trump came into office, jobs grew slowly, prices rose from tariffs, and the economy lost momentum.
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- BLS reported that total nonfarm payroll employment “changed little” in August 2025 (+22,000) and has shown little change since April. (bls.gov)
- The unemployment rate rose from 4.0% in January 2025 to 4.3% by August 2025. (bls.gov)
- Manufacturing employment was down 78,000 over the year as of August, and the ISM Manufacturing PMI stayed in contraction at 49.1 in September, with the Employment Index contracting for an eighth straight month. (bls.gov)
- Job openings were essentially flat at 7.2 million in August and hiring and quits were little changed, underscoring cooler labor demand. (bls.gov)
- Households’ job-loss expectations worsened in September, according to the New York Fed’s Survey of Consumer Expectations. (reuters.com)
- The Chicago Fed’s labor indicators showed a lower hiring rate for unemployed workers versus a year earlier and forecast the unemployment rate around 4.32% in September. (chicagofed.org)
¶ Broader activity data and sentiment point to cooling momentum
- Real GDP fell at a 0.2% annualized rate in Q1 2025; while Q2 rebounded 3.0%, BEA noted the increase reflected a decrease in imports and an increase in consumer spending, partly offset by declines in investment and exports. (bea.gov)
- The Conference Board’s Leading Economic Index fell 0.5% in August and declined 2.8% over the prior six months, with labor-market components weighing. (prnewswire.com)
- Consumer sentiment hovered near mid-50s in September/October, with respondents citing weakening job prospects. (reuters.com)
- The Federal Reserve cut rates on September 17, 2025, citing moderated growth, slower job gains, and an uptick in unemployment. (federalreserve.gov)
¶ Trump’s tariff actions raised costs and weighed on growth
- On April 2, 2025, Trump ordered a “reciprocal tariff” that imposed an additional 10% ad valorem duty on virtually all imports starting April 5, with higher country‑specific rates to follow. (whitehouse.gov)
- On March 26, 2025, he imposed 25% tariffs on automobiles and many auto parts; on June 3, 2025, he doubled steel and aluminum tariffs to 50%. (whitehouse.gov)
- On October 10, 2025, he announced 100% tariffs on Chinese imports effective November 1, escalating trade tensions. (washingtonpost.com)
- China increased retaliatory tariffs up to 125% on U.S. goods in response to U.S. actions. (fas.usda.gov)
- Goldman Sachs projected these tariff moves would lift 2025 inflation and slow growth to roughly 1% (Q4/Q4) with unemployment rising to about 4.5%. (cnbc.com)
- Independent analysis from Yale’s Budget Lab estimated a 10% across‑the‑board tariff (and higher China rates) would raise the price level by 1.4–5.1% and reduce the level of real GDP by 0.5–1.4%. (budgetlab.yale.edu)
- Prior research by New York Fed/Princeton/Columbia found U.S. tariffs were largely passed through to domestic prices, burdening U.S. consumers and firms. (cnbc.com)
¶ Immigration crackdowns reduced labor supply and near‑term growth potential
- DHS formally terminated the CHNV humanitarian parole programs on March 25, 2025, and set April 24 for ending parole periods; USCIS confirmed revocation of associated work authorizations (C11 EADs). (federalregister.gov)
- DHS highlighted a Supreme Court order allowing termination to proceed, clearing the way for removals. (dhs.gov)
- The San Francisco Fed estimated net international migration fell sharply in 2025 (on track near 1.0 million versus about 2.6 million in 2024), materially reducing labor‑force growth. (frbsf.org)
- Brookings analysis concluded a sharp drop in net migration in 2025 would directly subtract about 0.2 percentage point from GDP growth and translate into significantly lower monthly job gains. (brookings.edu)
- CBO projections reported fewer immigrants and a smaller prime‑age workforce ahead under the administration’s deportation policies. (apnews.com)
¶ Federal workforce policies and the 2025 shutdown created additional drag
- Trump instituted a federal hiring freeze on January 20, 2025, later extended in April; by August, BLS reported federal government employment had fallen by 97,000 since January. (whitehouse.gov)
- During the shutdown, the administration initiated permanent Reduction‑in‑Force layoffs across agencies, intensifying the employment hit. (reuters.com)
- Economists estimate shutdowns reduce real GDP growth by up to 0.1 percentage point for each week they last, with longer shutdowns causing larger losses. (economics.td.com)
¶ Business surveys and investment signals reflect tariff‑ and policy‑driven headwinds
- The ISM Manufacturing PMI remained below 50 for much of 2025, indicating contraction, as firms reported weak demand and staffing reductions. (prnewswire.com)
- CFO optimism slipped as tariff risks rose in early 2025, signaling expectations of slower growth and higher prices. (reuters.com)
- Small‑business polling showed a majority expected tariffs to negatively affect their firms over the next year. (cnbc.com)