Uncertainty with tariffs makes US companies cautious in hiring

When the president Donald Trump imposed new tariffs last year, many economists quickly warned that prices and unemployment would soar. With most of the 2025 economic results already released, it appears these predictions are partially correct.

While prices for certain imports, such as beef, coffee and tomatoes, have increased significantly over the past year, overall price increases have remained largely unchanged. The same cannot be said about job market.

O average monthly job growth last year was the lowest in decades, excluding periods of recession. Furthermore, the unemployment rate increased by 0.4 percentage points, reaching 4,4% em 2025according to the December jobs reportreleased on Friday (9).

Although the job market was already becoming tighter before 2025, Trump’s sweeping tariffs and your countless settings subsequent no helped.

With little clarity about Trump’s next steps, companies have suspended hiring plans or, in some cases, laid off employees.

“There is no compelling reason to go out hiring en masse,” said economist Sean Snaith of University and Florida Central. “That’s a rational response when dealing with that kind of uncertainty.”

Tariffs have also changed companies’ calculations about what is and isn’t currently profitable.

“Businesses are seeing higher prices, which reduces profitability; and in terms of new investments, they are hesitant because tariffs turn many investments that were profitable into unprofitable ones,” said Dean Baker, senior economist at Center for Economic and Policy Research.

Customers are also postponing purchases due to instability in fare levels.

For example, the Richmond Federal Reserve noted in its recent Beige Book, a compilation of company reports, that several manufacturing sector contacts “said their customers had reduced new orders due to tariff uncertainty.”