Tariffs Impact American Jobs More Than Consumer Prices

Economic forecasts regarding the impact of President Donald Trump’s tariffs last year appear to be partially accurate, according to recent economic data. While some price increases occurred, the job market experienced notable shifts.

Price Impacts

Prices for certain imports, including beef, coffee, and tomatoes, rose significantly last year. However, overall price increases remained relatively unchanged.

Job Market Trends

The average monthly job growth in 2025 was the lowest in decades, excluding recessionary periods. The unemployment rate increased by 0.4 percentage points to 4.4% as reported in the December jobs report. The job market had already been tightening prior to 2025, but Trump’s sweeping tariffs and subsequent adjustments have not alleviated this trend.

Business Response and Economic Uncertainty

Businesses have paused hiring plans or implemented layoffs due to a lack of clarity regarding Trump’s future trade policy decisions. This uncertainty has led businesses to reassess profitability, with tariffs rendering some previously profitable investments unprofitable. Customers have also delayed purchases, as noted by the Federal Reserve Bank of Richmond in its recent Beige Book.

Businesses have largely absorbed the increased costs of tariffs rather than passing them on to consumers, which has helped to contain inflation. This situation could change depending on the Supreme Court’s ruling in a significant tariff case, which could potentially invalidate Trump’s most substantial levies and lead to potential refunds for businesses.

Ultimately, both the muted price increases and the slower hiring rate are attributable to economic uncertainty.