Tariffs may have cost US economy thousands of jobs monthly, Fed analysis reveals

Core Insights - The Federal Reserve Bank of Kansas City analysis indicates that tariffs have likely slowed job growth in the U.S. economy, with employment growth dropping from 170,000 per month in 2024 to 75,000 per month through August 2025 [1][6] Economic Impact of Tariffs - Tariffs can theoretically influence labor demand, and the higher tariffs from the Trump administration coincide with other factors affecting the workforce, such as AI emergence, an aging population, and reduced immigration [2] - The analysis found that sectors with higher exposure to tariffs experienced a more significant decline in job growth compared to those with lower exposure [6][7] Job Growth Estimates - Economists concluded that domestic firms may have added fewer jobs in response to tariffs, similar to the effects observed from the 2018 tariffs [3] - The analysis estimated that the economy could have added an average of 19,000 more jobs per month from January 2025 to August 2025 without the suppressive effects of tariffs [10] Unemployment Rate Implications - The tariffs may have increased the unemployment rate by 0.1 percentage points if the labor force size remained constant [11] - Recent data showed the unemployment rate rose to 4.4% in December, marking the highest level since September 2021 [13]