Macro Briefing: 1 August 2025

President Trump signed an executive order Thursday that revised “reciprocal” tariffs on dozens of countries, with updated import fees ranging from 10% to 41%. “It doesn’t mean that somebody doesn’t come along in four weeks and say we can make some kind of a deal,” he said in an interview yesterday. The latest tariff rates will start from Aug. 7, a White House official advised in an emailed statement.

US initial jobless claims rose slightly last week, but remain low. “Initial claims have been noisy over the last few weeks due to seasonal factors,” said Nancy Vanden Houten at Oxford Economics. “Sorting through the noise, initial claims are consistent with a low pace of layoffs.”

Consumer spending rose 0.3% in June, rebounding from May’s flat report, according to Commerce Department data released Thursday. Personal income rose 0.3% in June and the savings rate held steady at 4.5%, Thursday’s report showed.

The AI arms race is accelerating as the major tech companies ramp up spending. Morgan Stanley projects $2.9 trillion in spending from 2025 to 2028 on chips, servers and data-center infrastructure. The investments, according to the bank, will contribute as much as 0.5% of US GDP growth in 2025 and 2026.

The Federal Reserve’s preferred inflation gauge ticked higher in June, which may be a sign that broad-based tariffs are starting to lift prices for many goods. Prices rose 2.6% in June compared with a year ago, up from an annual pace of 2.4% in May.