Economic Data Sparks Concerns Over US Economy Amid Tariff Pressures

Wall Street's Optimism faces a reality check as recent economic data reveals cracks in the US economy's resilience. Despite record stock highs fueled by expectations of minimal tariff fallout, last week's reports painted a more complex picture.

The labor market showed early signs of strain, with hiring rates hitting a seven-month low and worker confidence metrics dropping sharply. While Q2 GDP rebounded at a 3% annualized pace, economists warn this growth masks underlying weakness. Private domestic demand grew at its slowest pace since 2022, suggesting fundamental softness in consumer and business activity.

Policy uncertainty, tariff-driven inflation, and immigration constraints are now visibly weighing on economic performance. The Fed's preferred inflation gauge accelerated in June, maintaining pressure on policymakers as price growth persists above target levels.