The US Economy amid Rising Global Uncertainty

Contrary to upbeat announcements on the prospects for the US economy from the current administration in Washington, economic conditions are softening for this year. The market for labor is increasing anemically after the significant downward adjustments to the earlier months of 2025 and the disappointing reports in recent months (July and August 2025) that showed small numbers of new jobs. The unemployment rate ticked up as did the jobless claims for August. The Federal Reserve Bank of New York’s Survey of Household Spending showed a broad-based decrease in the rate of growth: from 4.5 percent in April to 4.1 percent in August--the lowest level since April 2021. The same survey, however, showed that the share of consumers making large purchases (electronics, home appliances, furniture, home repairs, and vehicles) increased from 53.5 percent to 60.8 percent over the past four months (April) of this year, perhaps due to worries about American tariffs causing forthcoming price increases. In the same survey, the expected year-ahead growth in necessary spending decreased from 4.9 to 4.7 percent over the past four months (FRBNY 2025a). This is in concert with the decline in consumer confidence reported in September (Conference Board 2025).