With details yet to emerge on the agreement between the United States and China for reciprocal reductions in tariffs on $30 billion of each other’s imports, both the specific tariff levels and the timing remain uncertain. Should any regulatory process accept comments before final determinations are made, it may be beneficial for parties to file comments seeking a broader range of products.
On September 29, the Administration’s ban on almost $1 billion of Canadian imports took effect, marking the latest escalation of its trade war with the United States’ northern neighbor. President Trump threatened the ban earlier in September in response to Canada’s retaliation against the 50% Section 338 tariffs imposed on Canada. It includes Canadian dairy products, motorcycles, and liquor. The next day from the Oval Office, President Trump remarked that Canada was “very bad” and was “being taught a little lesson.” While refusing to respond to President Trump’s statement earlier in the week that he expects Canada to return to the negotiating table in a few weeks with an apology, Prime Minister Carney restated on Tuesday that “Canada stands ready to negotiate in good faith.”
An article published by Axios last week explored potential shifts in global attitudes on trade and tariffs, even as President Trump’s actions and rhetoric remain divisive. Recent meetings in Milwaukee highlighted broader concerns shared by a range of countries over excess capacity in steel production. This potentially might indicate that while President Trump’s approach to trade policy will expire at the end of his term, tariffs in some form could persist much longer.
The economy grew at a faster pace than previously estimated in the first half of 2025. Data released by the Commerce Department last Wednesday indicated that real gross domestic product rose at a 2.2 percent annual rate in the April through June period. The previous estimate had been for 1.5 percent growth.
The upward revision reflected stronger results for consumer spending, investment, and government expenditures. Real consumer spending rose 3.8 percent annualized, revised up from 3.4 percent. Nominal growth, which is not adjusted for inflation, was revised up from an estimated 8 percent to 8.5 percent.
Growth in real final sales to private domestic purchasers, a critical measure of underlying economic strength, was revised up by four-tenths of a percentage point to 4.6 percent. Prior to adjusting for inflation, final sales to private domestic purchasers rose at an annualized pace of 9.5 percent. Real gross domestic income was revised up to an annual growth rate of 2.6 percent from 2.2. The average of GDP and GDI, sometimes called gross domestic product, rose 2.4 percent, up from the prior estimate of 1.8 percent.
The Federal Reserve’s preferred measure of inflation rose by much less than expected in August, according to data also reported last Wednesday from the Commerce Department. The personal consumption expenditures price index climbed 3.4 percent over the past 12 months through August. Economists had forecast a 3.7 percent increase.
For the month, the PCE price index rose 0.3 percent, below the 0.4 percent increase forecast. The prior month’s inflation data was revised down. July’s PCE index now shows a 0.1 percent monthly increase, down from 0.2 percent. The annual increase was revised down to 3.4 percent from 3.7 percent.
Excluding food and energy, so-called core PCE prices rose by 0.2 percent for the month and by three percent year-over-year. The consensus forecast was for a 0.3 percent increase for the month and 3.3 percent for the year. Goods prices rose 0.3 percent in August compared with July. Services also rose by 0.3 percent.
American businesses brought far more workers onto their payrolls than expected in September, according to data from payroll processor ADP. Private companies added 90,000 jobs in September, up from a revised 36,000 jobs added in August, ADP said. Economists had expected around 70,000 jobs.
Americans stepped up their spending in August, defying some of the weakest readings on consumer sentiment and confidence in years.
Personal consumption expenditures rose 0.9 percent, or $190.8 billion, the Commerce Department’s Bureau of Economic Analysis reported Wednesday, after a revised 0.1 percent increase in July. Adjusted for inflation, spending increased 0.6 percent, following a 0.1 percent gain the prior month.
The burst has not been matched by households' reports of how they feel. The Conference Board’s consumer-confidence index fell to 81.9 in September, the lowest level since 2014. The University of Michigan’s sentiment index dropped in September to 48.1, down from 51.7 in August and 15 percent below its January reading. Consumers have pointed to high prices, gasoline costs, and a weaker outlook for jobs and business. Those worries have not shown up at the cash register.
Spending on goods increased by $114.1 billion, and spending on services rose by $76.7 billion. The largest contributions came from other nondurable goods, gasoline and other energy products, food services and accommodations, and motor vehicles and parts. Recreational goods also rose. Recreation services were the exception, falling $10.3 billion.
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