FTR Transportation Intelligence on this week's Freight Today Blog analyzed a number of areas that industry and business leaders should consider as we approach August.

Highlights from the blog:

Tariffs Return to the Spotlight

• President Trump reignited tariff threats with a proposed 35% duty on Canadian imports and potential blanket tariffs of 15%–20% on most trading partners.
• Over 20 countries received individualized tariff rate letters ahead of the anticipated August 1 implementation date.
• Although many carve-outs (product-specific exemptions) are expected, the scope and unpredictability of these measures are heightening economic policy uncertainty.

Consumer Activity Slows

• Personal consumption growth decelerated sharply from 2.8% in 2024 to just 0.5% in Q1 2025.
• May saw a 0.3% decline in consumption and a significant cooling in consumer credit expansion.
• Retail sales fell 0.9% in May, driven largely by weak performance in autos and discretionary categories, though e-commerce remains a bright spot.

Business Sentiment Erodes

President Trump secured passage of a major fiscal bill and benefited from a “solid” jobs report, but both could carry significant long-term risks:

• The NFIB Small Business Index edged down to 98.6 in June, reflecting unease around trade and immigration policies.
• Capex plans weakened: firms reporting capital expenditures fell to the lowest level since mid-2020.
• While hiring plans have stabilized, difficulty in filling open roles continues, especially in healthcare, education and public safety.

Labor Market: Resilient, Yet Sluggish

• Initial jobless claims dropped to 227,000 in early July, but continued claims rose to their highest level since late 2021.
• Long-term unemployment (27+ weeks) climbed to 23.3%, suggesting it’s taking longer for job seekers to find employment.
• The labor market remains functional, but momentum is clearly softening outside of a few resilient sectors.

Eyes on the Data: Inflation, Retail, Housing

This week brings a critical set of data releases:

• CPI (Tues): Core inflation remains modest, but higher gas prices may push June’s CPI up 0.25%, bringing the annual rate to 2.6%.
• Retail Sales (Thurs): A modest 0.2% gain is expected, but this won’t fully recover May’s decline.
• Housing Starts (Fri): Both single- and multi-family permits are down, with total starts likely falling to a 1.23 million unit rate.

Strategic Takeaways

• Volatility Ahead: Tariff escalation, particularly with broad threats to key partners, increases downside risk for Q3 and Q4.
• Consumer Retrenchment: Slowing consumption could pressure retail and service sectors, especially discretionary categories.
• Watch Capital Investment: Weakening capex may limit productivity and growth in the medium term.
• Labor Freeze: Job markets aren’t crashing—but they are stagnating, limiting upward mobility and wage growth.