As we approach the end of July 2025, the global economic landscape—particularly in the United States and the Eurozone—presents a dynamic worth monitoring. From labor markets to interest rate policies, the latest data suggest that the economy stands at a critical crossroads between recovery and caution.
U.S. Labor Market: Stable, Yet Slowing
The JOLTS Job Openings report for June 2025 showed a decline of 46,000 job openings, bringing the total to 8.184 million—still above pre-pandemic levels but reflecting a clear slowdown trend. Hiring also weakened, dropping by 314,000 to 5.341 million, the lowest post-pandemic figure.
Interestingly, while hiring activity has declined, layoffs and dismissals also fell to 180,000—the lowest since late 2022—indicating that companies are exercising restraint in workforce reductions to maintain stability amidst uncertainty. Resignation rates have also dropped to their lowest level in three years.
Federal Reserve Chair Jerome Powell referred to the current condition as a “balance between wage slowdown and easing inflation,” underlining that the labor market remains a pivotal point for future monetary policy direction.
Economic Growth: U.S. Strengthens, Eurozone Stalls
On the growth front, U.S. Gross Domestic Product (GDP) expanded by 2.5% year-over-year in Q2 2025—exceeding market expectations. In contrast, the Eurozone only posted a stagnant 0.1% quarter-over-quarter growth.
Global manufacturing PMIs have shown signs of recovery, especially in the U.S. and Europe, although uncertainties surrounding trade policies remain a key risk to watch.
The USDJPY pair rose, driven by a strengthening U.S. dollar and a weakening yen.
July FOMC Meeting: Cautious Wait-and-See Stance
The July meeting of the Federal Open Market Committee (FOMC) highlighted a “wait-and-see” approach. The Fed is not expected to change interest rates in the near term, opting to await clearer data on inflation and employment.
U.S. tariff policy is also under scrutiny, as it could influence inflation and industrial competitiveness. A similar cautious stance is being adopted by other central banks such as the Bank of Canada and the Bank of Japan, all grappling with global uncertainty.
PCE Inflation: The Fed’s Main Focus
Personal Consumption Expenditures (PCE) inflation, the Fed’s preferred gauge, shows that core inflation remains high, though signs of easing are emerging. This trend indicates that while price pressures may be subsiding, it is still too early to confirm any aggressive policy shifts.
Non-Farm Payroll: Labor Market Still Solid
April 2025 Non-Farm Payroll data reported the addition of 177,000 jobs—surpassing market forecasts. This reinforces the narrative that while signs of a slowdown exist, the labor market remains relatively strong. Unemployment has remained steady at 4.2%.
Manufacturing PMI: Industry Sector Gaining Momentum
The ISM Manufacturing PMI for July came in above 50, signaling expansion in the U.S. manufacturing sector. Output and new orders are rising, even as pricing pressures persist. Similar trends are being observed in Asia and Europe, supporting the narrative of a broad-based industrial recovery.
Conclusion: At a Global Economic Crossroads
Current economic conditions in the U.S. and globally reflect a delicate balance between recovery optimism and caution regarding external risks—especially tariffs and geopolitics. On one hand, inflation appears to be under control and the labor market remains resilient, but on the other, global growth remains fragile.
What to Watch Going Forward?
- Key Data: PCE inflation and Non-Farm Payroll will be crucial indicators for forecasting the Fed’s policy direction.
- Interest Rates: Every FOMC decision will impact global markets—from equities to currencies.
- Business Readiness: Companies must remain agile in facing tariff risks and manufacturing sector volatility.
In this ever-evolving environment, vigilance and adaptability will be key to navigating a global economy filled with both challenges and opportunities.
📺 Watch the replay of Maxco’s Market Outlook on YouTube – July 28, 2025 Edition!
End-of-July Focus: Which Assets Will Bring the Most Luck?
📌 Source: https://www.youtube.com/watch?v=ql0R5yZk6Lc