US Labor Market Resilience - More Hype than Reality

As I noted in an earlier post (see link below), initial nonfarm payroll jobs numbers were giving a false signal regarding the health of the U.S. labor market. They were being subject to repeated and significant downward revisions. We now know that the first half of 2025 was a disaster from a job creation perspective:
https://www.bls.gov/web/empsit/cesnaicsrev.htm

From May 2, 2025:
US Nonfarm Payrolls – Pay Attention to Data Revisions

https://vivekjayakumar.blogspot.com/2025/05/us-nonfarm-payrolls-pay-attention-to.html

Here are the revised figures from BLS:

The Tragic Consequences of Trump's Trade War

Global Trade Raised Living Standards for Millions. New Barriers Are Reversing the Trend.
https://www.wsj.com/world/asia/trump-global-trade-living-standards-f4c5a2ae
In Indonesia and elsewhere, export manufacturing helped narrow the wealth gap with the West, creating a consumer class, but that transformation has stalled.  

In a Country Trump Says Nobody’s Heard Of, Tariffs Bring Chaos
https://www.wsj.com/world/africa/lesotho-tariffs-state-of-disaster-87c17f46
Lesotho has declared a state of disaster due to mass layoffs following the threat of 50% tariffs.

How the Threat of Trump’s Highest Tariff Derailed an African Nation
https://www.nytimes.com/2025/08/01/world/africa/lesotho-tariffs-textile-industry.html
The president backed off his call for a 50 percent tariff on Lesotho, imposing 15 percent instead. But in a country where most people live hand-to-mouth, the damage was already done.

America Will Pay for Trump's Tariff Rampage

America will be the chief victim of Trump’s tariffs rampage by Ambrose Evans-Pritchard
https://www.telegraph.co.uk/business/2025/08/01/america-will-be-the-chief-victim-of-trumps-tariffs-rampage/
“We’re looking at a shock to the economy seven or eight times as big as Smoot-Hawley,” said Paul Krugman, a Nobel laureate for trade theory.
Euphoric markets are wishing away the reckless demolition of a global trade system built, led, and painstakingly nurtured by the US for 80 years. “People just keep wanting to believe that Trump is making sense, that he isn’t as ignorant and irresponsible as he seems. But he is,” said Prof Krugman.
US economic growth slowed to 1.1pc in the first half of the year. You have to combine the two quarters because tariff “front-running” distorted the GDP data. The relevant metric is that real final sales are the weakest since 2022.
 
Trump’s trade war returns America to the 1930s
https://www.telegraph.co.uk/business/2025/08/01/trumps-trade-war-returns-america-to-the-1930s/ 

Fracturing of the Social Order

The Crucial Issue of the 21st Century
https://www.nytimes.com/2025/07/31/opinion/democratic-republican-parties.html
David Brooks:
According to recent surveys, public trust in institutions is near its historical low. According to a recent Ipsos survey, about two-thirds of Americans agree with the statement, “Society is broken.”
As David Frum pointed out recently in The Atlantic, between 1983 and 2007, the share of Americans who were satisfied with “the way things are going in the U.S.” hit peaks of about 70 percent and was often above 50 percent. Over the 15 years from 2007 to 2022, the number of Americans who were satisfied with the way things were going was frequently down to about 25 percent.
America’s social order has fractured, and that has made all the difference. 

Global Cities in the Twenty-First Century

China and the rise of the new global city
https://www.ft.com/content/6c5d968e-f526-442b-a372-af630cb9fab0
Adam Tooze:
If you visit China today, you will see something that was not on our radar two decades ago: mega cities of giant scale with tens of millions of inhabitants, spectacularly modern technology and infrastructure, deeply connected to the world economy but virtually empty of foreign inhabitants. …
The Sinosphere has its own cultural-linguistic logic. The Chinese language erects huge barriers to in-migration. But, at the same time, command of simplified Mandarin creates a shared culture for at least one-eighth of humanity. That opens the path to mass migration. Beijing may not have many foreign inhabitants but almost 40 per cent of its population has recently arrived from other parts of China.  

US Economy - Separating the Signal from the Noise

Separating the Signal from the Noise: 
The ‘core GDP’ measure, which captures real final sales to private domestic purchasers, offers a useful gauge of underlying demand in the economy. It indicates that the U.S. economy slowed down during the first half of 2025. See chart:
https://fred.stlouisfed.org/graph/?g=1L0aU 

Related:

U.S. Economy Slowed in First Half of 2025 as Tariffs Scrambled Data
https://www.nytimes.com/2025/07/30/business/us-economy-grew-in-second-quarter-as-tariffs-scrambled-data.html
Gross domestic product rebounded in the spring after contracting at the start of the year, but consumer spending remained weak.

The Weirdest GDP Report Ever
https://www.wsj.com/opinion/gdp-report-economy-consumers-donald-trump-tariffs-d9879d98
The economy grew 3%, but mainly because imports collapsed. Alas, investment fell too.
 
Rebound in US economic growth in second quarter masks underlying slowing trend
https://www.reuters.com/world/us/rebound-us-economic-growth-second-quarter-masks-underlying-slowing-trend-2025-07-30 

The Tariffs Kicked In. The Sky Didn’t Fall. Were the Economists Wrong?
https://www.nytimes.com/2025/07/31/opinion/tariffs-economy-inflation-recession.html

Trump's List of Foreign Policy Errors Continue to Grow

Trump’s Missed Opportunities Are Piling Up
https://foreignpolicy.com/2025/07/29/trumps-missed-opportunities-are-piling-up/
The Trump administration had an unprecedented chance to change the United States for the better.
 
What Has Being a ‘True Friend’ to Trump Gotten Modi? Not Much, Indians Say.
https://www.nytimes.com/2025/07/31/world/asia/modi-trump-india-tariffs.html
India’s prime minister has made a big effort to build closer ties using his rapport with the U.S. president, but critics say he is getting little in return.

Has Trump Damaged India-US ties Beyond Repair?

https://youtu.be/zKiRslJSHA4

Trump Is Pushing India to Submit to China
https://foreignpolicy.com/2025/07/28/india-china-normalization-trump-second-term-geopolitics/
Without clear U.S. support, the cost of resisting Beijing is too high.
 
Why Brazil Might End Up with Higher Tariffs Than Any Other Nation
https://foreignpolicy.com/2025/07/30/brazil-trump-tariffs-lula/
The rift between the Western Hemisphere’s two largest democracies is the strongest evidence yet that Trump is in the business of autocracy promotion. 

No One Is Defying Trump Like Brazil’s President
https://www.nytimes.com/2025/07/30/world/americas/brazil-president-lula-trump-tariffs.html
Faced with threats of 50 percent tariffs and demands to end a criminal case, President Luiz Inácio Lula da Silva said he wouldn’t take orders from President Trump.
 
Brazil’s Brave Stand Against Trump
https://www.project-syndicate.org/commentary/brazil-president-lula-standing-up-to-trump-by-joseph-e-stiglitz-2025-07