Moody’s Analytics chief economist Mark Zandi warned that the labor market is stagnant and blamed President Donald Trump’s tariffs in part.
But he said in a statement that an upcoming Supreme Court ruling on the administration’s global tariffs could provide relief and help revive job growth. Sunday social media posts.
That’s after Latest monthly employment report Data showed that employment increased by 50,000 people in December, while the unemployment rate edged down to 4.4%. For all of 2025, employers added just 584,000 jobs, down sharply from 2 million jobs in 2024 and the weakest year outside of a recession since the early 2000s.
Jobs have not grown since Trump’s “Liberation Day” tariffs shocked global markets in April, Zandi said, adding that a subsequent correction would likely see a net decline.
“This reflects the direct impact of tariffs on manufacturing, transportation and distribution, and agriculture-related businesses, which are steadily losing jobs, as well as the indirect uncertainty surrounding hiring at most other businesses,” he explained.
In fact, industries affected by trade suffered huge losses last year. For example, manufacturing has lost 70,000 jobs since April. Mining, logging and warehousing also caused tens of thousands of losses.
Meanwhile, health care and social services are among the few industries hiring steadily. Without these two sectors, the U.S. economy would see fewer jobs this year.
“Other factors are certainly at play, including highly restrictive immigration policies, DOGE cuts and artificial intelligence; however, the traces of the global trade war are all over the weak job market,” Zandi added. “So the quickest way to boost the job market is for the Supreme Court to declare reciprocal tariffs illegal and let lawmakers make them a thing of the past.”
A judge is expected to rule at any time on Trump’s ability to impose tariffs under the International Emergency Economic Powers Act (IEEPA).
The law has been used for much of Trump’s trade war, including so-called reciprocal tariffs and fentanyl-related tariffs. The government also uses IEEPA tariffs to secure trade deals with the European Union, Japan, South Korea and other countries.
But if the Supreme Court rules against Trump, it won’t end his tariff regime. Other levies are based on separate laws and are not considered by the High Court.
New tariffs can also be imposed outside IEEPA, although implementation of these tariffs takes longer and some tariffs only provide for shorter import duty periods.
While administration officials have expressed confidence they have other ways to impose tariffs, Trump may not immediately seize the opportunity.
Trump lifts some tariffs on coffee, pasta and other staples as affordability crisis tops lawmakers’ agenda Tariffs on furniture postponed.