The extraordinary resilience of the United States economy continues to astonish. New economic analysis shows that the tariffs implemented in recent years did little harm. The labour market is strong and business activity surveys are reverting to trend. This is a further signal that the economic fundamentals continue to be quite robust, despite the ongoing trade war.
Recent economic indicators reveal that the impact of tariffs has not significantly hampered the overall health of the US economy. Data from various sectors shows a strong alignment with historical trends, suggesting that businesses have adapted well to the existing tariff environment. Private sector activity, as measured by the composite Purchasing Managers’ Index (PMI) from S&P, normalized sharply last week. This increase marks a return of business activity among many different professions.
The continued strength of the US labour market makes this positive picture even brighter. The overall unemployment picture recent jobless claims figures have been very promising, with no signs of blue collar mass layoffs and middle class collapse. It’s true that without those major layoffs, analysts have focused on the overall robustness of the job market, which signals widespread strength. That resilience continues to undergird strong consumer spending and overall economic growth.
Moreover, PMI-type surveys of business activity, survey after survey, point to normalization back to trend as firms adapt to the new normal. This normalization illustrates that businesses have made great strides in proactively tackling tariffs and other burdensome realities to ensure their continued operations. Without this smart, strong management, these supply chains and productivity would have suffered tremendous disruption.
The US dollar—the greenback—has been getting in on the act, too, riding this wave of surprising economic goodness. Now, as data keeps coming in painting the picture of a less cloudy economic being, analysts are feeling more bullish on the currency. A strong labor market is raising business activity levels throughout the U.S. Together, this forms a highly favorable environment for the US dollar and makes it more attractive to international investors.
As we can see from the recent resiliency of our economy despite negative externalities US tariffs, the economy is pretty resilient against outside forces. Stakeholders across sectors have expressed cautious optimism. Even as they pose challenges like navigating the complexities of trade policies, they’re helping to keep their operations – and their communities – vibrant. This flexibility will be critical to powering future growth in an ever more competitive global economy.