An analysis by the Federal Reserve Bank of Kansas City found that tariffs may have slowed job growth in the U.S. economy in 2025 after higher import taxes were implemented.
Economists at the Kansas City Fed noted that employment growth slowed markedly from 170,000 per month in 2024 to only 75,000 per month through August 2025, a trend that Fed policymakers have monitored closely and which helped prompt three interest rate cuts at the central bank's meetings in September, October and December.
The report notes that tariffs can theoretically increase or decrease the demand for labor in the economy and that the higher tariffs implemented by the Trump administration are occurring alongside other developments affecting the workforce, such as the emergence of artificial intelligence (AI), an aging population and reduced immigration.
"Overall, our findings suggest — at least thus far — domestic firms might have added fewer jobs in response to tariffs, similar to the employment effects of the 2018 tariffs," the economists concluded.