Pantheon Publications

6 August 2025 US Monitor Why have tariff revenues undershot the White House's expectations?

• China’s share of US imports has collapsed to just 7%, from 13%, but looks set to rebound soon. 
• Some importers likely have gamed the de minimis exemption, but the loophole will close later this month.
• Services inflation likely will remain contained, despite the further increase in the ISM prices index.

5 August 2025 US Monitor The average effective tariff rate is now near 20%; upside risks ahead

• The average effective tariff rate has risen to 19%, from 16% a month ago; risks tilt towards a further rise.
• Shifting trade flows, margin compression and price rises abroad will temper the boost to consumer prices.
• The DOGE cuts were a small but significant drag on GDP in Q2, and probably will be again in Q3.

PM Datanote: US Employment, July 2025

Revisions reveal a sharp slowdown; September easing incoming.

4 August 2025 US Monitor Dire July employment report makes a September easing far more likely

• Meager job gains in July and huge downward revisions leave payrolls looking far weaker than before.
• Private payrolls ex-healthcare fell by 16K per month on average in the three months to July.
• The stable unemployment rate reflects young people deferring active job search; hidden slack is mounting.

1 August 2025 US Monitor Consumers' spending to stagnate as real incomes flatline

• The meager growth in consumers’ spending in the first half of this year probably will continue in the second.
• Modest gains in nominal incomes will struggle to keep up with the post-tariff jump in consumer prices.
• We see core PCE inflation hitting 3¼% by year-end, but expect the Fed to prioritize the softening labor market.

31 July 2025 US Monitor Markets cut September easing odds post-FOMC, but the data will decide

• Markets cut September easing odds to 50% after Mr. Powell spoke, but labor market data will force the issue.
• 3% headline GDP growth mostly reflects the distortions that depressed growth in Q1 unwinding. 
• Underlying growth has slowed sharply since late 2024, and looks set to remain relatively weak. 

30 July 2025 US Monitor The labor market is limping on; trade deals won't reinvigorate it

• Job openings are trending down and people say new jobs are harder to find; expect subpar July payrolls.
• The fall in demand for more labor has been led by non-retail services; tariff certainty won't help much.
• Q2 GDP likely rose at a 3% pace—cue White House bragging—but the trend is likely just half that rate.

29 July 2025 US Monitor The consensus for a three-digit July payroll print looks complacent 

• We look for a 75K rise in July payrolls; key surveys are weak and federal job cuts likely increased.
• A rebound in the unemployment rate looks likely, given the sustained rise in continuing claims.
• The 15% tariff on EU imports includes most previously exempt goods, so the overall AETR has risen to 17%.

28 July 2025 US Monitor Headline GDP likely jumped by 3% in Q2, obscuring underlying weakness

• We think headline GDP leapt by around 3% in Q2 overall, but underlying growth was much weaker…
• …Look for a tepid 1½% gain consumers’ spending and a drop of about 2½% in fixed investment…
• …But measurement issues likely meant a huge contribution from net trade was only partly offset elsewhere.

22 July 2025 US Monitor State-level payrolls cast further doubt on a migrant exodus

• BLS data suggesting the foreign-born workforce is already rapidly shrinking look implausible.
• Sector-level payrolls in California and Texas suggest most undocumented workers remain in their jobs.
• A bird’s eye view of employment growth in the other 48 states and DC tells a similar story.

July 2025 - US Economic Chartbook

CONSUMERS’ SPENDING IS SLOWING...

• ...WEAKER PAYROLLS IN Q3 WILL EXERT FURTHER PRESSURE

PM Datanote: US Michigan Sentiment Survey, July

Hard to trust given the rock-bottom response rate.

21 July 2025 US Monitor Will the unwinding of June's jump in education jobs depress Q3 payrolls?

• The jump in June education jobs is more likely to be revised away than to unwind over coming months.
• June education jobs were revised down in 2022, 2023 and 2024; no other data corroborate the 2025 jump.
• A structural break following a mid-2024 methodology change makes the Michigan survey hard to believe.

18 July 2025 US Monitor Clearer signs of tariff-induced weakness in June retail sales volumes

• The modest gains in nominal retail sales in June were boosted by price rises; sales volumes were stagnant.
• Real consumption likely rose by just 1½% in Q2 and is on track for even slower growth in Q3.   
• The cost of new tariffs has so far been borne entirely by US importers, rather than foreign exporters. 

PM Datanote: US PPI, June

Services disinflation is partly countering the tariff uplift to goods prices.

17 July 2025 US Monitor PPI data show tariffs are inflationary, but only for goods

• PPI and CPI data collectively point to a 0.28% increase in the June core PCE deflator; tariffs mostly to blame.
• The core PPI was unchanged partly due to a plunge in prices charged for accommodation, which are volatile.
• Announcing a shadow fed Chair is a bigger risk than removing Mr. Powell immediately from his post.

16 July 2025 US Monitor Tariff-related price hikes hit in June, with worse to come in July

The June rise in core goods prices, ex-autos, was the biggest in three years; import-sensitive prices leapt...

...But only a quarter of the tariff costs has come through so far; expect even bigger price rises in July.

CPI services inflation will continue to cool, but it will offset only about half the pick-up in goods inflation.  

PM Datanote: US CPI, June

A knock-out punch to the tariff inflation deniers.

15 July 2025 US Monitor Retail slowdown likely continued in June, as headline sales flat-lined

• We think headline retail sales were little changed in June, after falling in April and May.
• A small price-driven increase in control sales was likely mostly offset by another fall in auto sales.
• Homebase are roughly consistent with 150K for July private payrolls, but we prefer to trust other indicators.

14 July 2025 US Monitor Income tax clarity won't reinvigorate households' spending in Q3

• The slowdown in consumption this year has been sharpest in areas dominated by higher earners...
• ...Slower asset price gains and expected real wage declines have weighed more than tax hike risk.
• Mortgage applications have risen sharply; people are fed up waiting for mortgage rates to fall.