The American job market is sending distress signals, and economist Mark Zandi has a clear culprit in mind: President Donald Trump's tariff policies. According to Zandi, these trade restrictions are doing real damage to employment, though a Supreme Court decision could potentially reverse course.

Tariffs Hit Where It Hurts Most

In a weekend social media post, Zandi didn't mince words about what's happening. "This reflects the direct effects of the tariffs on manufacturing, transportation and distribution, and ag-related businesses, which are steadily losing jobs, as well as the indirect uncertainty hit to hiring by most other businesses," he wrote.

The numbers back him up. December's jobs report showed a meager 50,000 new positions, with unemployment ticking down slightly to 4.4%. But zoom out to the full year, and the picture gets grimmer: employers added just 584,000 jobs in 2025, a dramatic collapse from 2 million in 2024. It's the weakest annual job growth outside of a recession since the early 2000s.

Winners and Losers in the New Trade War

Not all sectors are suffering equally. Trade-exposed industries are getting hammered. Manufacturing alone has dropped 70,000 jobs since April, while mining, logging, and warehousing have also cut tens of thousands of positions. Meanwhile, health care and social services keep chugging along, still hiring when much of the economy has gone cautious.

Zandi points to other contributing factors as well: "Other factors are certainly at play, including highly restrictive immigration policies, DOGE cuts, and artificial intelligence; however, the global trade war's fingerprints are all over the ailing job market."

Manufacturing's Broad Retreat

The manufacturing slowdown isn't isolated to a few struggling companies. Joel Griffith noted the sector has posted eight consecutive months of job losses, citing pressure from Trump's tariffs. Joe Weisenthal highlighted that only 38.2% of manufacturing sub-sectors are still adding jobs, down from 47.2% a year earlier. That's a widespread pullback, not a narrow problem.

There's a curious bright spot, though: consumer confidence actually improved at the start of 2026. The University of Michigan's preliminary January sentiment index climbed to 54, the highest since September. Lower-income households drove the improvement, and fears about accelerating job losses eased somewhat. Still, worries about high prices, tariffs, and the softening labor market kept overall sentiment well below where it was a year ago.