The Economy Is Going Fine—Except For People Who Make Stuff

Core Insights - The services sector of the economy expanded at its fastest pace in December, marking its 10th month of growth in the last 12 months, while the manufacturing sector continued to struggle, slowing down for the 10th consecutive month [2][4][9] Group 1: Economic Performance - The services sector constitutes 73% of the economy as measured by Gross Domestic Product, compared to manufacturing's 9% share, indicating the services sector's dominance in economic activity [5] - Employment in the services sector expanded in December for the first time since May, contrasting with manufacturing, which has lost an average of 9,600 jobs per month since April [6] Group 2: Impact of Tariffs - Tariffs imposed last year aimed to protect U.S. manufacturing but have instead led to increased costs, reduced demand, and job losses in the manufacturing sector [3][9] - Managers in various industries, including chemicals and food services, reported that tariffs have raised prices and created uncertainty, negatively impacting their operations [5][8] Group 3: Economic Outlook - Despite the struggles in manufacturing, the overall economy appears to be growing at a solid pace, supported by the resilience of the services sector [10] - The continued expansion in services suggests that the economy is still on a growth trajectory, even if it did not end the year on a high note [10]