Latest news with #MarthaGimbel
The Hill
2 days ago
- Business
- The Hill
Trump tariffs: A grocery shopper's guide
President Trump's tariffs could raise the cost of some of the most popular imports in American grocery aisles, from coffee and olive oil to wine, matcha and spices. After the 'Liberation Day' tariffs kicked in worldwide in early August, businesses and consumers alike are watching closely for when — and how much — prices tick up. Inflation data released Tuesday did not show an overall increase in food prices, but economists say that's likely to change as businesses pass more costs on to consumers. Wholesale prices surged 0.9 percent last month, the biggest monthly jump since June 2022 and a sign that inflation may not be cooling off just yet. 'Many of us anticipated ahead of time that you might see some faster movement in groceries, partly because you can't stockpile stuff right in the same way,' said Martha Gimbel, the Budget Lab at Yale's executive director. 'You can't stockpile a year's worth of avocados. That being said, the price increases that we've seen in food so far are pretty muted, so we'll just have to see what happens,' she said. Here are six iconic imported grocery products that could be impacted by Trump's tariffs. Coffee Coffee prices were already up before a 50 percent tariff on Brazil, the top coffee importer to the U.S., went into effect last week. Coffee prices sharply rose 25 percent over the past three months, according to inflation data released Tuesday. Reuters reported Tuesday that Brazilian coffee exports have started seeing postponements to their U.S. shipments. How hard your morning habit gets hit varies between brand, shop and choice of bean. Nespresso pods, for instance, are entirely produced in Switzerland, which is subject to a 40 percent tariff. Colombia, the second-largest importer of coffee to the U.S., only pays Trump's 10 percent baseline duty. 'Some importers might shift sourcing toward countries with exemptions, but in many cases the increased costs will all be passed on to you, the coffee lover,' Todd Carmichael, the co-founder of La Colombe, wrote in The Washington Post earlier this week. 'Surely, coffee is too essential and too global to put at the center of a geopolitical chess match.' Rep. Ro Khanna (D-Calif.) said Wednesday he would introduce a bill with bipartisan support to repeal tariffs on coffee. Olive oil Trump's tariffs have only added to the uncertainty facing olive oil producers, who are grappling with climate shocks. Extended droughts in Spain in 2022 slashed production, and other top production regions like Sicily and Greece have also confronted record-high temperatures. Allen Dushi, a co-founder of olive oil brand Graza, said the company has held off on increasing prices, adding that any uptick in import costs could take at least three to four months to reflect on grocery shelves. Many retailers or distributors require 60 to 90 days notice for a change, he said. The company uses Spanish olives, and production and bottling are all based in Spain. That limits the extent to which the company can keep stocks in the U.S., which would have to be finished bottles. 'We are not trying to stockpile inventory, because our priority number one is always the quality of what's inside the bottle,' Dushi said. 'That's not something we really compromise on.' Switching to American production wouldn't help, Dushi added; the company would still have to pay tariffs on Spanish olives, as American olive production doesn't meet the same standard. 'So as long as you're buying the oil, and importing the oil, you're going to be paying the tariff on that,' he said. Spain and Italy accounted for two-thirds of U.S. olive oil imports in 2024. Both are subject to the 15 percent tariff under the trade deal struck between the European Union and the U.S. in July. Other top producers are still subject to tariffs, such as Tunisia (25 percent), Turkey (15 percent) and Argentina (10 percent). Wine The July U.S.-E.U. trade deal was seen as a starting point. As negotiations have continued, the beverage industry and European officials have pushed for an exemption for wine and spirits, The Wall Street Journal reported. A group of nearly 60 associations representing wine, beer and liquor interests warned last week that the industry could face nearly $2 billion in lost sales and have to cut more than 25,000 jobs in the U.S. as a result of the tariff. The coalition, Toasts not Tariffs, pointed to products like cognac that have to be produced in a specific region and cannot be switched to a tariff-free alternative. Eric Foret is a wine buyer at Le French Wine Club, which operates several locations in New York City and Washington, D.C., alongside an online shop. He said that he had to increase his prices, although they were fairly gradual. 'It's a dollar here, a dollar there, a dollar here, a dollar there and then at the end, you spend ten dollars more on the bottle of wine, you don't even notice it,' he said. In addition to France, which accounted for more than one-third of U.S. wine imports last year, the EU tariff impacts shipments from Italy (33 percent of imports) and Spain (6 percent). Matcha A 15 percent tariff on Japan could impact the price of a matcha latte — already a pricey product before tax, tip and oat milk. While U.S. trade data does not specifically track matcha, Japan generally accounts for about half of American green tea imports by value each year, and Japanese origin is a selling point for many specialty matcha shops. The industry is also grappling with the impacts of record heat waves in Japan last summer that curbed harvests of tencha, the tea leaves dried and ground into matcha. Demand for the vibrant green beverage has also soared in recent years, driven by young enthusiasts and social media. David Cooper runs Spot of Tea, a Washington, D.C.-based shop with three locations selling matcha and other tea drinks. He considers himself lucky to have bought his 2025 stockpile before the tariffs and shortages hit. Now, however, 'we're looking at how much stock we have in our warehouse and then how much we're going through per month and doing the math and trying to push the suppliers to finalize the order as quickly as possible,' he said. 'It's definitely a little anxiety-inducing.' The uncertainty for the drink industry even extends to things like cups, Cooper said, which his shop sources from South Korea. 'I think on the day I was about to put the deposit down, Trump announced 25 percent tariffs for Korea. And so our supplier was basically, like, we cannot absorb all this cost,' he said. 'It's just so hard to tell at this point what percentage tariff is actually going to be applied.' Chocolate Switzerland, home to many famous chocolate brands, is facing a 39 percent duty, one of the highest in the world. Some of the country's larger manufacturers will be able to escape some tariff impacts because they already have production sites in the U.S. Lindt & Sprüngli, for example, produces the 'vast majority' of its products for the American market in New Hampshire, a company spokesperson said. That plant will still have to factor in tariff effects on raw materials like cocoa, imported from countries like Ivory Coast, Ecuador, Indonesia and Malaysia. Other companies, however, have made their brand on manufacturing in Switzerland. That's the case for Läderach, which is now figuring out how to manage 'massive additional costs,' its CEO said this week. 'I cannot change the tariffs. It is only human to get angry about them, enquire on who's guilt they are or be discouraged,' Johannes Läderach wrote in a LinkedIn post. 'But none of these options change anything, so I better pray for serenity to accept it.' Swiss leaders have attempted to negotiate with Washington on the tariff, which also impacts cheese and other exports. Swiss officials are now reportedly weighing whether to cancel an order for American F-35 fighter jets. Spices Trump shocked many observers by raising tariffs on India to 50 percent last week, citing its purchase of Russian oil. India is the top U.S. importer for spices like nutmeg, cardamom, anise, fennel, coriander, and cumin. Indonesia, another key producer, is subject to a 19 percent duty after negotiating with the White House. The American Spice Trade Association said in a Tuesday letter to Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer that many of its products could not be cultivated in the U.S.. 'The importation of spices directly supports approximately 50,000 U.S. jobs across processing, quality assurance, distribution, and product development,' the association said. Spice producer McCormick said in late June that tariffs could cost it as much as $90 million a year and that it was planning to raise some prices by the end of the year.
NBC News
08-08-2025
- Business
- NBC News
Not today, AI: Despite corporate hype, few signs that the tech is taking jobs — yet
The job market has begun looking shakier. How much is artificial intelligence to blame? Not a whole lot. At least not yet. A review of employment surveys, interviews with labor market analysts and recent company earnings reports shows little evidence, so far, that would support assertions of a widespread economic impact from AI's growing usage. 'It's such an emotional thing for people, many of whom are determined to see it in the data,' said Martha Gimbel, executive director and co-founder of the Budget Lab at Yale University and a former President Joe Biden economic adviser. 'And it's just not there yet.' Much is riding on the payoff from AI. The stock market has been hitting record highs largely thanks to gains from tech giants like Nvidia, Google parent Alphabet, Facebook parent Meta and Microsoft, which have made enormous investments in pumping out AI-related products. For precisely that reason, analysts say, some businesses may be incentivized to hype AI's potential as a disruptive force. Through the end of July, the term 'AI' has been cited on about two-thirds of second-quarter earnings calls conducted by S&P 500 companies, according to the data provider Factset. That's up from less than half in the first quarter. Amid a downshifting economy, cost pressures are mounting, prompting corporate leaders to hype AI's potential as a savings source — even if it's not quite there yet. 'In 2023, you'd have a high-profile public company do a job cut and cite rising interest rates or uncertain macro conditions,' Roger Lee, a tech entrepreneur who also runs a website that tracks tech industry layoffs, said. 'Today, it's AI.' The most extreme warning about AI's short-term impact has come from Dario Amodei, co-founder and CEO of AI firm Anthropic. In May, he told Axios that he foresees half of all entry-level white-collar jobs being wiped out in the next one to five years, spiking unemployment to between 10% and 20%. So far, evidence for this scenario is mixed. All job openings, entry-level or otherwise, have been declining since 2023, according to labor market analytics company Revelio Labs, though the trend has not been linear. Revelio said entry-level jobs exposed to AI have been declining fastest — but senior roles exposed to AI have actually begun to recover. The broader picture for white-collar professions most at risk of disruption actually indicates fairly stable employment trends. Last week's official jobs report showed office and administrative roles have actually returned to their pandemic-era highs, while employment in other professional sectors, like accounting and legal services, has held relatively steady. It's a gloomier story in tech — but also a more nuanced one when it comes to AI's impact. The leaders of Amazon and Microsoft have both signaled the ability to run their businesses with reduced headcount thanks to AI. Tech layoffs tracked by Lee's website hit a three-month high in July, with three companies — Intel, Microsoft and Recruit Holdings, the parent of Indeed and Glassdoor — largely responsible. All three of those companies cited artificial intelligence as playing a role in the job reductions, Lee said. But he noted that in the case of Recruit Holdings, there were no specifics about how AI had impacted the lost positions. The company simply said the technology was 'changing the world.' 'It does seem like many of the roles being cut are in line with ones being used by AI,' Lee said. 'But it's still being used as a cover in other cases.' A representative for Recruit did not respond to a request for comment. The simple calculus behind AI is that businesses will be able to do more with less, increasing overall productivity while reducing hiring needs. Yet economists say it is difficult to calculate accurate changes in productivity over the short term — though so far, the broadest national measure has shown a deceleration in recent quarters. Most of the benefits of AI are instead accruing to consumers, not businesses, according to a forthcoming paper from researchers at Carnegie Mellon and Stanford University. If it feels like much of the value from the current generation of AI seems mostly to allow ordinary people to generate emails and papers faster, or do quicker research, you're not imagining things. 'Free goods are invisible in the GDP numbers, even if they make consumers better off,' the authors, Avinash Collis and Erik Brynjolfsson, wrote in a recent Wall Street Journal op-ed. They calculate consumers derived the equivalent of $97 billion in surplus welfare from generative AI in 2024, compared with $7 billion in revenues logged by the tech firms actually creating AI products. Economies typically see a 'J-curve' effect when transformative technologies are introduced, Collis told NBC News. At first there is a bottleneck that can cause some disruptions, though these initial effects are often not captured in official figures. For example, the iPhone increased the total global volume of photos from billions to trillions, something that directly impacted workers at camera giant Kodak, but created incalculable opportunities elsewhere, Collis said. 'There will likely be a lot of impact, perhaps on some sectors negatively,' Collis said. 'But at the same time lots of new jobs could be created as well.' Other indicators do suggest the stirrings of a more pronounced AI effect on jobs. The July employment survey from consultancy Challenger, Gray and Christmas found companies have blamed 'automation and AI implementation' for 20,000 job cuts in 2025, with another 10,000 or so directly attributable to artificial intelligence. Challenger said this shows 'a significant acceleration in AI-related restructuring.' Those figures are dwarfed by cuts related to government spending declines and general economic and market conditions, which account for nearly 500,000 lost roles this year, Challenger said. Some companies appear to be keeping payroll counts steady in response to the broad uncertainty in the economy, and using any additional resources to explore AI's potential to boost their bottom lines. Stacy Spikes, CEO of MoviePass, told NBC News that internal workflows at his company become vastly more efficient thanks to AI. That's made him more gun-shy about bringing on new workers into certain departments, like software. As of Tuesday, MoviePass' careers page showed no open positions. 'We haven't seen headcount need to increase,' Spikes said. Businesses like MoviePass still appear to be the exception, however. Analysts at Goldman Sachs say only about 9% of all companies are regularly using new AI tools to produce goods or services. As a result, they see only limited effects at the moment. 'When I look at the impact that AI has had on the overall labor market data so far, it looks pretty small to me,' Joseph Briggs, head of the global economics team at Goldman Sachs Research, said on a recent company podcast. Even for recent college grads, who have seen unemployment rates tick higher, 'the anecdotes and the relationship that the anecdotes have to AI is often a little bit overstated,' Briggs said. JP Morgan analysts came to a similar conclusion, finding that, for now, its research 'failed to find a significant impact on job growth.' But they cautioned that this could change at the next economic downturn. For white-collar workers, 'we think that during the course of the next recession the speed and the breadth of the adoption of the AI tools and applications in the workplace might induce large scale displacement for occupations,' they said in a recent note to clients. Others remain more optimistic about the potential for new opportunities to overcome any negative effects. That's how Nvidia co-founder and CEO Jensen Huang sees it. As the head of an AI giant, he may also have reason to hype its potential — but his outlook is notably rosier than Anthropic's Amodei's. Huang told Axios last month that the technology would ultimately lead to more jobs, even if there are some redundancies elsewhere. 'Everyone's jobs will change,' he said. 'Some jobs will be unnecessary. Some people will lose jobs. But many new jobs will be created. ... The world will be more productive.'
Reuters
03-07-2025
- Business
- Reuters
US job growth expected to slow in June, unemployment rate forecast to rise
WASHINGTON, July 3 (Reuters) - The U.S. labor market likely slowed further in June, with the unemployment rate expected to have edged up to more than a 3-1/2-year high of 4.3%, as economic uncertainty stemming from the Trump administration's policies curbed hiring. The anticipated moderation in job growth will probably be insufficient to spur the Federal Reserve to resume its interest rate cuts in July, with the Labor Department's closely watched employment report on Thursday also expected to show solid wage gains last month. The report is being published early because of the Independence Day holiday on Friday. A string of indicators, including the number of people filing for state jobless benefits and receiving unemployment checks, has pointed to labor market fatigue after a strong performance that shielded the economy from recession as the U.S. central bank aggressively tightened monetary policy to combat high inflation. Economists say President Donald Trump's focus on what they call anti-growth policies, including sweeping tariffs on imported goods, mass deportations of migrants and sharp government spending cuts, has changed the public's perceptions of the economy. Business and consumer sentiment surged in the wake of Trump's victory in the presidential election last November in anticipation of tax cuts and a less stringent regulatory environment before slumping about two months later. "It's a very uncertain time," said Martha Gimbel, executive director of the Budget Lab at Yale University. "It's just hard for people to make decisions right now." Nonfarm payrolls likely increased by 110,000 jobs last month after rising by 139,000 in May, a Reuters survey of economists showed. That reading would be below the three-month average gain of 135,000. Estimates ranged from a rise of 50,000 to 160,000 jobs. Average hourly earnings are forecast to jump 0.3% after advancing 0.4% in May. That change would keep the annual increase in wages at 3.9%. Economists estimate the economy needs to create between 100,000 and 170,000 jobs per month to keep up with growth in the working-age population. They will be watching for revisions to the April and May data. Revisions this year have been skewed to the downside. Some economists speculated that small businesses were filing late responses to the establishment survey, from which the nonfarm payrolls are derived. "Whatever the cause of the revisions, the established pattern means it makes sense to subtract about 30,000 from the first estimate of June payrolls and to focus on the trend rather than one month's numbers," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. Much of the slowdown in job growth reflects tepid hiring. Layoffs remain fairly low, with employers generally hoarding workers following difficulties finding labor during and after the COVID-19 pandemic. But layoffs are picking up and the lackluster hiring means fewer opportunities for those who lose their jobs, accounting for the anticipated uptick in the unemployment rate. A survey from the Conference Board last week showed the share of consumers who viewed jobs as being "plentiful" dropped to the lowest level in more than four years in June. The expected rise in the jobless rate last month to the highest level since October 2021 would follow three straight months in which it held steady at 4.2%. Most economists expect the unemployment rate will continue rising through the second half of this year, and potentially encourage the Fed to resume its policy easing cycle in September. The Fed last month left its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. Fed Chair Jerome Powell on Tuesday reiterated the central bank's plans to "wait and learn more" about the impact of tariffs on inflation before lowering rates again. "We are starting to see some important shifts that perhaps paint a worse light on the jobs market than most people have been thinking," said James Knightley, chief international economist at ING. "I don't think June's report is going to be weak enough to make the case for a July rate cut, but the risk is that the Fed is starting to think ... perhaps we need to put a bit more emphasis on where the jobs numbers are heading now." Some economists, however, see limited scope for the unemployment rate to rise as the immigration crackdown shrinks the labor pool. With the White House having revoked the temporary legal status of hundreds of thousands of migrants, economists said fewer than 100,000 additional jobs per month would likely be needed to keep the jobless rate stable. The healthcare sector likely continued to dominate the job gains last month. But leisure and hospitality employment could have been curbed by some migrants staying home in fear of being rounded up for deportation. Similar concerns could also have affected construction payrolls, while tariffs probably continued to weigh on manufacturing employment. Moderate federal government job losses likely persisted. The administration's unprecedented campaign to drastically shrink the federal workforce has been tangled in legal fights. "The mass of federal layoffs, the voluntary retirements and any reductions in force probably do not slow payrolls until October," said Michael Gapen, chief U.S. economist at Morgan Stanley. "Also, there has been little evidence yet of slower federal government hiring."
Yahoo
03-07-2025
- Business
- Yahoo
US job growth expected to slow in June, unemployment rate forecast to rise
By Lucia Mutikani WASHINGTON (Reuters) -The U.S. labor market likely slowed further in June, with the unemployment rate expected to have edged up to more than a 3-1/2-year high of 4.3%, as economic uncertainty stemming from the Trump administration's policies curbed hiring. The anticipated moderation in job growth will probably be insufficient to spur the Federal Reserve to resume its interest rate cuts in July, with the Labor Department's closely watched employment report on Thursday also expected to show solid wage gains last month. The report is being published early because of the Independence Day holiday on Friday. A string of indicators, including the number of people filing for state jobless benefits and receiving unemployment checks, has pointed to labor market fatigue after a strong performance that shielded the economy from recession as the U.S. central bank aggressively tightened monetary policy to combat high inflation. Economists say President Donald Trump's focus on what they call anti-growth policies, including sweeping tariffs on imported goods, mass deportations of migrants and sharp government spending cuts, has changed the public's perceptions of the economy. Business and consumer sentiment surged in the wake of Trump's victory in the presidential election last November in anticipation of tax cuts and a less stringent regulatory environment before slumping about two months later. "It's a very uncertain time," said Martha Gimbel, executive director of the Budget Lab at Yale University. "It's just hard for people to make decisions right now." Nonfarm payrolls likely increased by 110,000 jobs last month after rising by 139,000 in May, a Reuters survey of economists showed. That reading would be below the three-month average gain of 135,000. Estimates ranged from a rise of 50,000 to 160,000 jobs. Average hourly earnings are forecast to jump 0.3% after advancing 0.4% in May. That change would keep the annual increase in wages at 3.9%. Economists estimate the economy needs to create between 100,000 and 170,000 jobs per month to keep up with growth in the working-age population. They will be watching for revisions to the April and May data. Revisions this year have been skewed to the downside. Some economists speculated that small businesses were filing late responses to the establishment survey, from which the nonfarm payrolls are derived. "Whatever the cause of the revisions, the established pattern means it makes sense to subtract about 30,000 from the first estimate of June payrolls and to focus on the trend rather than one month's numbers," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. Much of the slowdown in job growth reflects tepid hiring. Layoffs remain fairly low, with employers generally hoarding workers following difficulties finding labor during and after the COVID-19 pandemic. RISING LAYOFFS But layoffs are picking up and the lackluster hiring means fewer opportunities for those who lose their jobs, accounting for the anticipated uptick in the unemployment rate. A survey from the Conference Board last week showed the share of consumers who viewed jobs as being "plentiful" dropped to the lowest level in more than four years in June. The expected rise in the jobless rate last month to the highest level since October 2021 would follow three straight months in which it held steady at 4.2%. Most economists expect the unemployment rate will continue rising through the second half of this year, and potentially encourage the Fed to resume its policy easing cycle in September. The Fed last month left its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. Fed Chair Jerome Powell on Tuesday reiterated the central bank's plans to "wait and learn more" about the impact of tariffs on inflation before lowering rates again. "We are starting to see some important shifts that perhaps paint a worse light on the jobs market than most people have been thinking," said James Knightley, chief international economist at ING. "I don't think June's report is going to be weak enough to make the case for a July rate cut, but the risk is that the Fed is starting to think ... perhaps we need to put a bit more emphasis on where the jobs numbers are heading now." Some economists, however, see limited scope for the unemployment rate to rise as the immigration crackdown shrinks the labor pool. With the White House having revoked the temporary legal status of hundreds of thousands of migrants, economists said fewer than 100,000 additional jobs per month would likely be needed to keep the jobless rate stable. The healthcare sector likely continued to dominate the job gains last month. But leisure and hospitality employment could have been curbed by some migrants staying home in fear of being rounded up for deportation. Similar concerns could also have affected construction payrolls, while tariffs probably continued to weigh on manufacturing employment. Moderate federal government job losses likely persisted. The administration's unprecedented campaign to drastically shrink the federal workforce has been tangled in legal fights. "The mass of federal layoffs, the voluntary retirements and any reductions in force probably do not slow payrolls until October," said Michael Gapen, chief U.S. economist at Morgan Stanley. "Also, there has been little evidence yet of slower federal government hiring."
Yahoo
03-07-2025
- Business
- Yahoo
US job growth expected to slow in June, unemployment rate forecast to rise
By Lucia Mutikani WASHINGTON (Reuters) -The U.S. labor market likely slowed further in June, with the unemployment rate expected to have edged up to more than a 3-1/2-year high of 4.3%, as economic uncertainty stemming from the Trump administration's policies curbed hiring. The anticipated moderation in job growth will probably be insufficient to spur the Federal Reserve to resume its interest rate cuts in July, with the Labor Department's closely watched employment report on Thursday also expected to show solid wage gains last month. The report is being published early because of the Independence Day holiday on Friday. A string of indicators, including the number of people filing for state jobless benefits and receiving unemployment checks, has pointed to labor market fatigue after a strong performance that shielded the economy from recession as the U.S. central bank aggressively tightened monetary policy to combat high inflation. Economists say President Donald Trump's focus on what they call anti-growth policies, including sweeping tariffs on imported goods, mass deportations of migrants and sharp government spending cuts, has changed the public's perceptions of the economy. Business and consumer sentiment surged in the wake of Trump's victory in the presidential election last November in anticipation of tax cuts and a less stringent regulatory environment before slumping about two months later. "It's a very uncertain time," said Martha Gimbel, executive director of the Budget Lab at Yale University. "It's just hard for people to make decisions right now." Nonfarm payrolls likely increased by 110,000 jobs last month after rising by 139,000 in May, a Reuters survey of economists showed. That reading would be below the three-month average gain of 135,000. Estimates ranged from a rise of 50,000 to 160,000 jobs. Average hourly earnings are forecast to jump 0.3% after advancing 0.4% in May. That change would keep the annual increase in wages at 3.9%. Economists estimate the economy needs to create between 100,000 and 170,000 jobs per month to keep up with growth in the working-age population. They will be watching for revisions to the April and May data. Revisions this year have been skewed to the downside. Some economists speculated that small businesses were filing late responses to the establishment survey, from which the nonfarm payrolls are derived. "Whatever the cause of the revisions, the established pattern means it makes sense to subtract about 30,000 from the first estimate of June payrolls and to focus on the trend rather than one month's numbers," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. Much of the slowdown in job growth reflects tepid hiring. Layoffs remain fairly low, with employers generally hoarding workers following difficulties finding labor during and after the COVID-19 pandemic. RISING LAYOFFS But layoffs are picking up and the lackluster hiring means fewer opportunities for those who lose their jobs, accounting for the anticipated uptick in the unemployment rate. A survey from the Conference Board last week showed the share of consumers who viewed jobs as being "plentiful" dropped to the lowest level in more than four years in June. The expected rise in the jobless rate last month to the highest level since October 2021 would follow three straight months in which it held steady at 4.2%. Most economists expect the unemployment rate will continue rising through the second half of this year, and potentially encourage the Fed to resume its policy easing cycle in September. The Fed last month left its benchmark overnight interest rate in the 4.25%-4.50% range, where it has been since December. Fed Chair Jerome Powell on Tuesday reiterated the central bank's plans to "wait and learn more" about the impact of tariffs on inflation before lowering rates again. "We are starting to see some important shifts that perhaps paint a worse light on the jobs market than most people have been thinking," said James Knightley, chief international economist at ING. "I don't think June's report is going to be weak enough to make the case for a July rate cut, but the risk is that the Fed is starting to think ... perhaps we need to put a bit more emphasis on where the jobs numbers are heading now." Some economists, however, see limited scope for the unemployment rate to rise as the immigration crackdown shrinks the labor pool. With the White House having revoked the temporary legal status of hundreds of thousands of migrants, economists said fewer than 100,000 additional jobs per month would likely be needed to keep the jobless rate stable. The healthcare sector likely continued to dominate the job gains last month. But leisure and hospitality employment could have been curbed by some migrants staying home in fear of being rounded up for deportation. Similar concerns could also have affected construction payrolls, while tariffs probably continued to weigh on manufacturing employment. Moderate federal government job losses likely persisted. The administration's unprecedented campaign to drastically shrink the federal workforce has been tangled in legal fights. "The mass of federal layoffs, the voluntary retirements and any reductions in force probably do not slow payrolls until October," said Michael Gapen, chief U.S. economist at Morgan Stanley. "Also, there has been little evidence yet of slower federal government hiring."
