The U.S. economy appears stable amidst the onset of a trade war, as evidenced by an addition of 177,000 jobs reported by the Labor Department, with the unemployment rate steady at 4.2%. Despite a contraction in the first quarter, primarily due to a surge in imports before tariffs took effect, the job growth streak extends to 52 months. While the current labor market is reassuring for investors, uncertainties regarding future consumer spending and trade conditions linger, indicating potential risks ahead as tariffs remain in place.
The latest message from the data on the U.S. economy is simple: So far, so good, until further notice.
The trajectory of trade and consumer spending going forward remains unclear.
What we can take away from today is that the U.S. economy has entered the trade war on strong footing.
But the longer tariffs are in place and the higher the tariff levels are, the greater the risk that this optimism quickly fades.
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