Wells Fargo Says Economy ‘Appears to Be Losing Some Steam’

Wells Fargo said Thursday (July 10) that it sees signs that the economy “appears to be losing some steam,” with job creation slowing and inflation expected to rise.

The bank said in its “U.S. Economic Outlook: July 2025“ that nonfarm payrolls added an average of 130,000 jobs per month during the first six months of the year — down from 164,000 during the same period in 2024 — and that inflation is expected to pick up in the second half due to newly imposed tariffs.

It added that job creation has been impacted by small businesses’ hiring plans remaining low, while inflation will be driven by companies raising prices once they’ve sold down the inventory they built up before the new tariffs were added.

Together, these trends are expected to lead the Federal Open Market Committee (FOMC) to lower interest rates by 25 bps at each of three meetings, in September, October and December, per the outlook.

This news came on the same day that it was reported that employers have been cautious about adding more employees even as they hold on to their current workers.

The latest figures from the Department of Labor, released Thursday, showed that while the number of Americans filing for unemployment dropped to the lowest level in seven weeks, the insured unemployment number rose to the highest level seen since Nov.13, 2021.

The Bureau of Labor Statistics reported July 3 that employment grew in June at about the same rate it’s been increasing over the past year, with gains in state government and health care, losses in federal government and little change in other major industries.

In another report released July 1, the Bureau of Labor Statistics said the number of job openings increased in May, with the biggest gains being seen in two industries: accommodation and food services, and finance and insurance.

The impact of tariffs was reportedly seen in data released Tuesday (July 8) by the Federal Reserve, which showed that non-revolving credit bumped higher as tariffs pushed consumers to buy bigger ticket items, such as cars, to get in under the wire.