JOBLESS CLAIMS
In the week ending July 5th, initial jobless claims were at a seasonally adjusted level of 227,000. This represents a decrease of 5,000 from the previous week’s figure. The four-week moving average stands at 235,500, down 5,750 from the previous week.
Last week’s data could have been affected by the July 4 holiday.
We are nearing the peak in the series’ mini-seasonality. It will be interesting to see how companies deal with tariffs as they begin to take hold in coming weeks. So far, layoffs are not significant.
More significant is the sharp increase in continued claims since the end of April. Laid off people are having a harder time to find a new job. Mini-seasonality also?
Trump Threatens 35% Tariff on Some Canadian Goods The new tariffs would exempt, for now, goods compliant with the U.S.-Mexico-Canada Agreement
The U.S. will put a 35% tariff on imports from Canada effective Aug. 1, President Trump announced on Thursday evening. (…)
Trump previously applied 25% tariffs to non-USMCA goods and the new rate, announced in a letter to Canadian Prime Minister Mark Carney and posted on social media, would mean that number rises to 35%, the official said. The U.S. and Canada had been involved in talks to lower tariffs ahead of a self-imposed July 21 deadline.
In a late Thursday post on the social-media platform X, Carney said Canadian officials would work with their U.S. counterpart in clinching a deal by Aug. 1. (…)
One senior Canadian government official said that Canada was growing increasingly resigned to a future deal that includes some tariffs, and negotiators have been trying in recent talks to keep tariff rates as low as possible. (…)
In the letter to Carney, Trump said he would raise the 35% again if Canada retaliated. He also complained about Canada’s dairy market, which restricts imports, and said Canada had to do more to restrict the flow of fentanyl into the U.S.
“If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter,” Trump said in the letter. “These Tariffs will be modified, upward or downward, depending on our relationship with your Country. You will never be disappointed with the United States of America.” (…)
Trade with the U.S. accounts for about one-fifth of Canada’s economic output. Canada’s economy has hit a tailspin because of trade-policy uncertainty. The unemployment rate has climbed to a roughly nine-year high—excluding the Covid-19 pandemic period—and domestic demand has weakened. (…)
Lula Tells Trump Brazil Can Survive Without US Trade
President Luiz Inacio Lula da Silva insisted Brazil can survive without trade with the US and will look to other partners to replace it, a sharp response to Donald Trump after the American leader threatened 50% tariffs against the nation.
“We’re going to have to look for other partners to buy our products. Brazil’s trade with the US represents 1.7% of its GDP,” Lula said in a broadcast interview with Record TV on Thursday evening. “It’s not like we can’t survive without the US.”
In a pair of televised interviews, the leftist leader struck a defiant tone toward his American counterpart, reiterating his stance that Trump must respect Brazil’s sovereignty and that the US president cannot act as if he owns other nations.
The Brazilian also said countries like his are not obliged to continue using the dollar to trade, reiterating remarks he made at last weekend’s BRICS summit in Rio de Janeiro that he acknowledged “likely worried Trump.”
“We are interested in creating a trade currency among other countries,” Lula said in the Record interview. “I’m not obligated to buy dollars to conduct trade with Venezuela, Bolivia, Chile, Sweden, the European Union, or China. We can trade in our own currencies.”
Trump on Wednesday said he would impose the tariffs on Brazilian goods in a letter that cited the legal woes of Jair Bolsonaro, the right-wing former president and Lula rival who is facing trial on charges that he attempted a coup following his 2022 election defeat. (…)
“He could have called Brazil to talk about the measures he’s going to take,” he said in the Globo interview. “It was a total lack of respect, and I don’t have to accept that lack of respect. I have nothing to talk about with Trump, he gives no reason to talk.”
Bloomberg Economics estimates that a 50% tariff would risk a 1% hit to Brazil’s economy. The levies could cause a 60% reduction in total US imports of goods from Brazil, although the South American nation could divert some exports to other markets, the report said. (…)
China, Japan Discuss Speeding Up Beef Export Ban Lift, NHK Says
Chinese Vice Premier He Lifeng and a senior official in Japan’s ruling party discussed speeding up the process to lift a ban on Japan’s beef exports to China, according to the public broadcaster NHK. (…)
Asia’s two largest economies are both engaged in trade negotiations with the US, and the progress on beef shipments could potentially put pressure on the Trump administration as a Aug. 1 deadline looms for higher across-the-board tariffs for Japan. Developments with China could either anger the US, or make them reconsider the importance of allies in the region.
For Japan, whose trade talks with the US have yet to produce any concrete results, China is the second biggest buyer of its exports after the US. Tokyo has welcomed China’s announcement earlier this year to start the process of lifting a ban on Japanese seafood. (…)
Vietnam Surprised by Trump Tariff Announcement, Seeks Lower Rate
Vietnam’s leadership was caught off guard by US President Donald Trump’s announcement last week that it agreed to a 20% tariff, and the Southeast Asian nation is still seeking to lower the rate, according to people familiar with the matter. (…)
The 20% figure came as a surprise as Vietnam believed it had secured a more favorable tariff range, the people said. (…)
The day after Trump’s Truth Social post on Vietnam, in which he called Lam “an absolute pleasure” to deal with, the country’s Ministry of Foreign Affairs said trade negotiators were still coordinating with their US counterparts to finalize the details of the agreement.
Since then, Vietnam’s leaders have skirted the issue in official comments. Prime Minister Pham Minh Chinh instead focused on Vietnam’s efforts to diversify export markets and supply chains to adapt to the new tariff policy and his comments were echoed a few days later by a deputy trade minister. (…)
More than a week after it was first revealed by Trump, neither side has published any kind of detailed outline, providing little clarity on how the 20% rate or the 40% levy on goods deemed to be transshipped through the country will be enacted or enforced.
Vietnam is trying to navigate Washington’s demands while keeping good relations with China, its biggest trading partner. Throughout the negotiations, the US demanded more action from Hanoi to prevent Chinese goods being rerouted and repackaged through Vietnam to skirt higher tariffs. Beijing said it was examining the trade agreement and would retaliate if its interests were hurt. (…)
While in Brazil for the BRICS summit, Chinh and China’s Premier Li Qiang agreed to boost economic, trade and investment ties between the two countries during a meeting on the sidelines. They also agreed to prioritize the construction of a railway link connecting the two countries, one of many signs of closer cooperation between the two neighbors underscoring Vietnam’s need to keep Beijing on side.
On Thursday, Trump told NBC News he’s eyeing blanket tariffs of 15% to 20% on most trading partners who haven’t been informed yet of their rates. The current global baseline minimum levy for nearly all US trading partners is 10%.
U.K. Economy Unexpectedly Slumps to Second Straight Month of Contraction The slowdown is likely to further cool a weakening jobs market, which would in turn pressure consumer spending
(…) Industry continued to struggle as the uncertainty around trade policy stymied demand, with output declining 0.9% in May, after a 0.6% fall in April. (…) Payrolls fell 109,000 in May, the largest drop since the onset of the pandemic in 2020. (…)
German Factory Orders Sink as Uncertainty Weighs
- Germany’s Jobless Rate Holds Steady Despite Signs of Labor-Market Weakness
Tariff Anxiety Spreading Across Japan, BOJ Report Shows Growing worries over higher U.S. tariffs prompt companies to be cautious about their investment plans
(…) In the central bank’s quarterly regional economic report, also released Thursday, there were examples of how the trade angst is affecting companies.
A machinery manufacturer in Osaka said it lowered its full-year production plan, as weaker investment from its U.S. clients damped demand for its products.
Another machinery maker in Japan’s northern prefecture said it plans to pass on tariff costs by raising prices on the products it sells in the U.S.
“Some of our U.S. clients have expressed reluctance, making price negotiations difficult,” the company was quoted as saying. (…)
Malaysia’s Central Bank Cuts Rates for First Time in Five Years
An increasing share of American adults are going hungry
More Americans are going hungry, per new data from Morning Consult.
It’s a shocking data point for the wealthiest country in the world, and comes at a time when the stock market is hitting record highs and President Trump just signed a bill slashing food benefits. (…)
The share of adults who tell Morning Consult in monthly surveys that they sometimes or often don’t have enough to eat — or are food insecure — has been creeping up over the past several years.
In May, 15.6% of adults were food insecure, almost double the rate in 2021. At that time Congress had beefed up SNAP benefits and expanded the Child Tax Credit driving down poverty rates, and giving people more money for food. (…)
Demand for food is up 120% from three years ago at the Philadelphia-area food bank network where George Matysik is executive director.
- As soon as the government support pulled back in 2022, “we started to see the numbers go up,” says Matysik, who is with the Share Food Program, which serves hundreds of thousands of people.
- Demand just continued to rise from there, along with grocery prices.
Congress just passed a huge cut to food benefits, or SNAP, that is likely to make the situation far worse, says Matycik.
- The “big, beautiful bill” pushes states to provide more funding for SNAP, and tightens work requirements for benefits.
- Before, adults over age 54 weren’t required to work; now the age limit is 64. And fewer parents are exempted from working, as well.
- It’s expected that millions will lose benefits, and more would receive less. (…)
Some of the cuts to SNAP, involving state funding, don’t take effect until 2028 — raising the possibility that they might not happen.
- The data also looks a bit volatile, bouncing around quite a bit — it spiked at the end of 2024, and it’s not clear why.
- It is likely a reflection of how precarious it is to make ends meet for folks at the lower end of the wage scale — some are in hourly jobs with fluctuating schedules, which can be rough on one’s personal finances.
The White House and congressional Republicans argue that cuts to these benefits are a way to push more people into the labor market and reduce dependence on government assistance, as well as an effort to reduce waste, fraud and abuse.
