Economic Uncertainty Grows as Job Losses and Tariffs Hit

The latest ADP report sent ripples through the economy, revealing a 33,000-job drop in private-sector employment for June 2025. This unexpected decline, the first negative print since 2023, points to a labor market losing steam. While some dismiss the data as a blip, the losses concentrated in services and small businesses suggest broader vulnerabilities. For workers and families, this news underscores a growing unease about job security.

John Lonski, a market economist, highlighted this shift on Fox Business, noting that companies may now feel emboldened to raise prices due to President Trump's new tariffs. The real question is who bears the cost, whether businesses, workers, or consumers already stretched thin? These steep duties, rolled out in April 2025 and reaching up to 60% on major trading partners, are reshaping economic dynamics.

For many Americans, the stakes are personal. A softening labor market, coupled with rising prices, threatens to erode the gains of recent wage growth. This moment demands a closer look at how policy choices are reshaping daily life, especially for those least equipped to absorb the shock.

At their core, Trump's tariffs function like a regressive tax, driving up the cost of everyday goods. Research shows that 60% to 100% of tariff costs are transferred to U.S. consumers. From clothing to appliances, prices are climbing, and low-income households feel the pinch most acutely. Real disposable income, already growing at a sluggish sub-2% rate, can't keep pace.

Historical precedent backs this up. The 2018-19 trade war with China pushed appliance prices up by about 8%, with no significant boost to manufacturing jobs. Similarly, the 2002 steel tariffs cost an estimated 200,000 jobs in downstream industries before their repeal. Today's broader and steeper tariffs risk repeating this cycle, amplifying economic strain at a time when consumer spending is already slowing.

The impact extends beyond financial considerations. Women and lower-income workers, heavily represented in sectors like education and health services, which saw 52,000 job losses in June, face disproportionate harm. These are the families least able to weather price hikes or job cuts, and they deserve policies that prioritize their stability.

The ADP report's job losses, particularly in professional services and small businesses, reveal a labor market under pressure. Small firms, lacking the resources to absorb tariff-driven cost increases, are scaling back hiring or closing entirely. This statistic signals that the economic foundation for millions of workers is eroding.

Wage growth, while steady at 4.4% for job-holders, may not last if hiring slows further. For job-changers, who enjoy 6.8% pay increases, opportunities are narrowing. The Federal Reserve, already grappling with mixed signals, faces a tough choice: keep rates high to tame inflation or cut them to spur growth. Either way, workers risk being squeezed between stagnant wages and rising costs.

Past trade disruptions offer a warning. The Smoot-Hawley tariffs of 1930 deepened the Great Depression by choking global demand. While today's context differs, the lesson holds: broad tariffs, especially during economic slowdowns, tend to backfire, cutting jobs and raising prices without delivering promised gains.

Addressing this crisis starts with rethinking trade policy. Rescinding or scaling back the 2025 tariffs would ease price pressures and stabilize supply chains. Multilateral trade negotiations, rather than unilateral duties, could address unfair practices without punishing American consumers. This approach aligns with a commitment to fairness and global cooperation.

For workers already affected, expanding unemployment insurance and job-training programs is critical. Targeted support for displaced workers in hard-hit sectors like education and health services can bridge the gap to new opportunities. These measures, paired with tax credits for low-income families, would cushion the blow of tariff-driven price hikes.

Strengthening antitrust enforcement is another key step. By curbing opportunistic price gouging, policymakers can protect consumers from corporations exploiting tariff costs to pad profits. These solutions prioritize economic justice, ensuring that workers and families aren't left to bear the burden of flawed policies.

The ADP report and the tariffs behind it expose a broader truth: Economic policies should serve people, prioritizing their well-being over market interests. The current path risks deepening inequality, with low-income households and vulnerable workers paying the steepest price. But this moment also offers a chance to chart a different course, one that values stability and fairness.

Prioritizing workers and their interests allows policymakers to rebuild trust in the economy. Scaling back tariffs, investing in job training, and protecting consumers from price gouging are practical steps toward that goal. These actions reflect a belief that prosperity should lift everyone, not just a few.

As prices rise and jobs falter, the urgency is clear. Americans deserve policies that strengthen their livelihoods, not ones that leave them scrambling to keep up. The time to act is now, before the costs of inaction grow too heavy to bear.