Tariffs did not hit consumers as hard as many feared, but they appear to have hit hiring harder. CNN argued that while some import prices rose, overall inflation stayed relatively contained, while the labor market weakened across 2025. Unemployment rose to 4.4% and average monthly job gains were among the weakest outside recession years. The “where” is broad: manufacturing, logistics, and trade-exposed sectors feel it first, then caution spreads.
The why is uncertainty. Companies have often absorbed tariff costs instead of passing them through to consumers, which dampens CPI but squeezes margins and makes new investments harder to underwrite. CNN described businesses pausing hiring plans amid shifting tariff levels and unclear next steps. That is how you get slower job creation without an obvious wave of layoffs.
Policy risk is now concentrated at the Supreme Court. Fortune reported Moody’s Analytics chief economist Mark Zandi’s view that a ruling could come “any day now” on the administration’s use of IEEPA authority, and that striking down the reciprocal tariffs would be the fastest way to revive job growth. The same report cited manufacturing down 70,000 jobs since April and emphasized that without health care and social services, payrolls might have fallen. Manufacturing down 70,000 is the kind of sector signal that can ripple into earnings and local labor markets.
Next steps depend on the ruling and the administration’s response. Even if the court limits IEEPA tariffs, other tariff tools remain, and any replacement regime would likely roll out more slowly. For investors and operators, that means volatility risk remains: a sudden tariff rollback could improve sentiment quickly, while a reaffirmation could keep capex and hiring cautious into midyear.
Reader takeaway. Treat tariffs as a labor-market variable as much as a price variable. Watch the Supreme Court timing and how quickly businesses shift from “wait-and-see” back to ordering, investing, and hiring.
