Positive US data bodes well for 2026 global economy

Despite the fear that US jobs growth was deteriorating, the figures finally released in November were better than expected. This, along with continued strong earnings from US corporates, caused markets to rebound.

We believe this was simply a pause in hiring as corporates try to get their head around Trump’s tariff implications. If corporates were ever going to stop hiring, it would have been after Liberation Day. Job growth would therefore recover as tariff uncertainty fell. Initial claims were not pointing to an increase in laid off workers and retail sales remained robust, which would have been unusual if households were losing jobs.

Thankfully the government shutdown ended, and we received confirmation that September jobs grew. We continue to believe the job market and consumer are fine but will monitor US economic data releases this month.

Chart 1: Job growth has recovered as expected while retail sales remain robust

Source: Macrobond, Schroders Economics Group. 21 November 2025

Tariff rates fall from 17% down to 13%

As Trump’s popularity falls, we’ve seen a shift in his rhetoric. After being caught with China’s rare earth capital controls, Trump has reduced tariffs on China, including dropping the fentanyl penalty. This has brought the US effective tariff rate down from around 17% to 13%. Trump has also started to shift more populist. We have the One Big Beautiful Bill increasing fiscal spending next year, but he has also flagged a $2000 handout to consumers from the tariff windfalls. Tariffs were originally supposed to change behaviour and bring manufacturing onshore or at least help plug the fiscal deficit if not. With trade deals and cash handouts, it seems neither will be the case.

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