Jobs and Chips
What has President Trump said this week?
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What has President Trump said this week? 〰️
1. August Jobs Report Shows Signs of Cooling
The August 2025 jobs report showed signs of cooling in the labor market, with the U.S. adding 142,000 jobs—below market expectations and lower than July’s figures. The unemployment rate ticked up to 4.2%, while wage growth eased, suggesting labor demand is stabilizing after a period of strong post-pandemic recovery (CBS News, 2025). These softer numbers increase the likelihood that the Federal Reserve will consider rate cuts at its September 17–18, 2025, meeting, where policymakers are expected to weigh whether the slowdown warrants a shift in monetary policy (CNBC, 2025).
Market analysts note that these trends carry significant implications for investors. Cyclical sectors such as retail, industrials, and housing are particularly sensitive to employment data and wage dynamics. Weaker hiring could point to easing demand, while potential Fed cuts may provide short-term support to equity markets. Still, many forecasts suggest growth expectations will need to be reassessed with greater caution (New York Times, 2025).
The report highlights a transition from rapid job creation to a more measured labor environment. President Trump has pointed to employment resilience as a marker of policy strength, though recent data indicates a gradual cooling. With the Fed’s decision approaching, investors and policymakers alike will be watching whether this slowdown proves temporary or signals a deeper shift in the trajectory of the economy.
2. The U.S. Chip Deal
The White House announced a deal with Nvidia and AMD aimed at securing U.S. access to advanced chips essential for artificial intelligence and defense applications. The agreement includes subsidies and regulatory support, while prioritizing domestic production to reduce reliance on foreign suppliers (BBC, 2025). President Trump framed the initiative as a cornerstone of U.S. technological leadership and a step toward reducing dependence on China.
Reactions have been mixed. Supporters argue the deal strengthens supply chains and fosters innovation, while critics warn it sets a risky precedent. A Chatham House report cautions that the arrangement may invite excessive executive involvement in private markets and strain global trade norms (Chatham House, 2025). Legal experts also point to potential constitutional challenges, particularly around federal authority to direct private corporations (Fortune, 2025).
For private equity investors, the deal presents both opportunity and risk. Expanded domestic chip production could stimulate growth in adjacent sectors such as data centers and AI infrastructure. At the same time, deeper government involvement heightens political risk, potentially reshaping valuations across the semiconductor supply chain. International trade responses—particularly from China—could further influence market forecasts and investment strategies.
3. Tariffs Face Court Test
The U.S. Supreme Court has agreed to review the legality of President Trump’s sweeping global tariffs, a central feature of his second-term economic agenda. At issue is his use of the 1977 International Emergency Economic Powers Act (IEEPA)to impose broad duties without congressional approval, an authority a federal appeals court recently ruled he exceeded. The case has been placed on a fast track, with oral arguments scheduled for early November. For now, the tariffs remain in effect, including “reciprocal” rates of up to 34% on Chinese goods and a 25% levy on imports from Canada and Mexico (The Guardian, 2025; NBC News, 2025).
President Trump has warned that delaying a ruling could force the government to unwind $750 billion–$1 trillion in duties already collected. U.S. Customs data show $475 billion in tariff revenue so far this fiscal year, with $210 billion directly tied to the contested measures. Economists note the duties are already pressuring the labor market, with tariff-sensitive sectors such as construction and manufacturing shedding jobs, while higher import prices contribute to inflation (CNN, 2025).
At the same time, Trump called on the EU to consider tariffs of up to 100% on China and Indiato cut off Russian oil revenues and pressure Moscow over the war in Ukraine. The proposal comes amid intensifying Russian strikes on Kyiv and Donbas, while Trump works to deepen trade ties with India in talks with Prime Minister Narendra Modi (BBC, 2025). These developments underscore the dual role of tariffs as both domestic policy tools and geopolitical levers. While expanded duties may offer fiscal gains and bargaining power, they also introduce heightened risks for global trade, inflation, and sector performance—particularly in manufacturing, construction, and consumer goods.