The "already muddled" U.S. economic picture is getting an unneeded dose of added uncertainty as a result of the Israel-Iran conflict, according to experts.
Consumers and economists are "in a state of confusion":
Recent global events have "left economists and consumers in a state of confusion."
Just days after the U.S. bombed Iranian nuclear facilities, the Trump administration "announced a cease-fire deal between Iran and Israel."
Experts say the "on-again/off-again" nature of the conflict mimics the "on-again/off-again" nature of the administration's actions around tariffs and immigration.
An index of economic uncertainty overseen by Stanford economics professor Nick Bloom tracks uncertainty "based on the number of news articles expressing the sentiment." According to Bloom, "readings in recent months have soared, hitting quadruple the long-running average."
For employers, added uncertainty "hampers investment and hiring."
If you were to ask me, give me a description of the United States economy, it’s ‘pervasive uncertainty.' There is too much risk on the table right now. We just don’t know in which direction we are truly headed.”
Read more via The Wall Street Journal
The Conference Board's Consumer Confidence Index declined by 5.4 points to 93.0 in June, down from 98.4 in May.
Consumer confidence declined across all age groups and "almost all income groups," according to the report.
The index measuring consumers' current assessment of business and labor market conditions declined 6.4 points to 129.1.
Consumers are also less optimistic about the future, with the index measuring expectations falling 4.6 points to 69.0. (That is notably "substantially below the threshold of 80 that typically signals a recession ahead.")
Consumers' "appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labor market," according to The Conference Board.
Consumer confidence weakened in June, erasing almost half of May’s sharp gains … Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly.”
How consumers are assessing current business conditions:
Only 19% of consumers described business conditions as good, compared to 21.4% in May.
29.2% of consumers described jobs as "plentiful," a decline from May's 31.1% figure.
Consumer expectations also indicated increasing pessimism:
Only 16.7% of consumers "expected business conditions to improve, down from 19.9% in May."
Just 15.4% of consumers are expecting “jobs to be available, down from 18.6% in May.”
This is an ‘abundance of caution economy.’"
Read more via Bloomberg, The Conference Board
Real gross domestic product (GDP) "decreased at an annual rate of 0.5 percent in the first quarter of 2025," according to the Commerce Department.
The Commerce Department previous estimate indicated that the U.S. economy shrank just 0.2% in the first quarter.
The downward revision for Q1 was "primarily" a reflection of "downward revisions to consumer spending and exports that were partly offset by a downward revision to imports."
The first quarter "drop in gross domestic product — the nation’s output of goods and services" follows real GDP growth of 2.4% in the fourth quarter of 2024.
Q1's real GDP decline is the "first time in three years that the economy contracted."
Read more via Associated Press, Bureau of Economic Analysis
According to the Labor Department, the number of American workers seeking unemployment benefits declined as “layoffs remain low.”
236,000 Americans filed jobless claims for the week ending June 21, a drop of 10,000 and a "historically low level."
Economists say the U.S. remains in a “no hire, no fire” labor market.
For those out of work, finding a job remains difficult. The number of Americans "continuing to claim unemployment aid" increased "37,000 to 1.97 million for the week ending June 14," the "most since November 2021."
According to Reuters, economists say the "elevated continuing claims" leads them to “expect that the unemployment rate rose to 4.3% in June from 4.2% in May.”
Read more via Associated Press, Reuters
Oregon Governor Tina Kotek signed a bill last week that will allow striking workers to collect unemployment pay: Oregon is the first state to "provide pay for picketing public employees," notable given public employees “aren’t allowed to strike in most states, let alone receive benefits for it.” Under SB916, striking workers are “eligible to collect unemployment benefits after two weeks, with benefits capped at 10 weeks.”
Also last week, Connecticut Governor Ned Lamont vetoed a bill that would have allowed striking workers to collect unemployment: Lamont said the state's unemployment fund is to "provide support to individuals who are out of work through no fault of their own" and that "extending benefits to individuals actively participating in labor disputes—even after a period of time—alters the fundamental purpose of the program."
Paying striking workers is a bridge too far and doesn’t help our cause."
Three other states (New York, New Jersey, and Washington) allow striking workers to access unemployment benefits: Washington's law was passed in May 2025 and allows “individuals unemployed due to a labor strike to receive up to six weeks of unemployment insurance benefits following a qualifying strike or lockout event.” In 2018, New Jersey Governor Phil Murphy signed into law legislation "allowing striking workers to collect UI benefits under a variety of different circumstances never before allowed under New Jersey’s Unemployment Compensation Law." In 2023, New Jersey passed “legislation further expanding the circumstances under which striking workers can collect unemployment insurance (UI) benefits.” In 2020, New York's Senate Bill 7310 was signed into law, making “New York employees who are out of work due to a labor dispute, such as a strike … eligible to collect unemployment benefits after a waiting period of only 14 days.”
Read more via OPB, Oregon SB916, CBIA, Connecticut SB8, Connecticut Mirror, Littler, Ogletree
Beginning July 1, 2025, Iowa employers are required to "treat adoptive parents the same as biological parents under certain circumstances."
In May, Iowa Governor Kim Reynolds signed House File 248, a law that requires employers to "treat adoptive parents the same as biological parents" provided an employee "adopts a child up to six years of age."
During the "first year of the adoption," employers must treat adoptive parents “in the same manner as an employee who is the biological parent of a newborn child for purposes of employment policies, benefits, and protections.”
Read more via JD Supra
India: Well over half (63%) of Indian employers have "either frozen hiring or are reducing staff strength amid global tensions," according to a new survey by Genius Consultants. 15% of surveyed companies are shifting "towards contract-based or freelance roles." (India Today, SIA)
Mexico: Workers at General Motors' San Luis Potosi assembly plant have "begun voting this week on whether to join the National Auto Workers Union (SINTTIA) labor union." If workers decide to join the union, that decision "would mark the first time that an independent union represents multiple plants in Mexico for a “Detroit Three” automaker." (Assembly Mag)
Norway: Labor unions came to an agreement on wages, "averting a strike at floating offshore oil and gas drilling rigs that would have disrupted exploration." The agreement applies to over 7,000 workers. Over 400 workers across three oil rigs were preparing to strike if an agreement was not reached. (Reuters)
United Kingdom: The number of new job listings increased by 0.3% in May to 726,084, according to the latest data released by the Recruitment and Employment Confederation (REC) and Lightcast. The number of overall job postings decreased 1.8% to 1,440,792 in May. Scotland and the southwest UK saw the "highest increase in the total number of job postings". (SIA)
