KPMG Economics

Economic Coordinates

Explore analysis of key data indicators, such as job creation and the labor market, consumer spending, inflation, investment, housing and monetary policy. These combined data points are indicators of the overall health of the economy.

• Wall Street braces for Iran retaliation
  According to Diane Swonk, Chief US Economist at KPMG, the US economy faces heightened risks due to potential Iranian retaliation following US and Israeli strikes on Iran's nuclear facilities. There are concerns about disruptions in the Strait of Hormuz affecting global oil prices, which could lead to a financial crisis amidst these geopolitical tensions. Despite these challenges, KPMG notes that the economy remains resilient, having previously navigated obstacles such as COVID-19 layoffs and inflation. Meanwhile, the Federal Reserve is adopting a cautious approach to interest rates, factoring in uncertainties from Trump's tariff policies and the ongoing Middle East conflict.
  June 23, 2025 | Boston Globe

• Israel-Iran tensions test central banks’ appetite for rate cuts
  The Federal Reserve and Bank of England are among the central banks due to meet in the coming days as Israel’s attack on Iran adds to a series of geopolitical shocks, including Trump’s trade war, that are clouding the outlook for growth and inflation. As officials prepare to make their latest economic projections this week, the hostilities between Israel and Iran will probably have worsened the trade-off between keeping prices in check and supporting a weakening U.S. labor market. “Until they have clarity, the Fed is in an uncomfortable limbo where they cannot preemptively cut,” said Diane Swonk, chief economist at KPMG U.S.
  June 15, 2025 | Agence France Presse

• One unintended result from the trade war? Shipping costs have doubled
  Meagan Schoenberger, senior economist at KPMG, said when shipping freezes up like that, shipping companies have to move their ships somewhere else: “To Atlantic shipping routes. To inter-region routes, so think about shipping within the Asian region, or within the Americas, or within Europe,” she said. But a month later, the Trump Administration lowered that tariff on Chinese goods and importers decided to load up. The problem is, Schoenberger said, container ships can’t just meet demand that quickly. Especially if those ships are off floating in the Atlantic. “You can’t just pick your ship and move it over 3,000 miles. It takes a very long time to move,” she said. As in, more than a week.
  June 13, 2025 | NPR
  

• Labor Market Looks Fragile, Fed Won’t Cut: KPMG’s Swonk
  KPMG Chief Economist Diane Swonk says the May jobs numbers "had a soft underbelly to them that is getting lost in translation." Speaking on "Bloomberg Open Interest." Swonk also says the Federal Reserve won't cut interest rates in the wake of the employment report.
  June 06, 2025 | Bloomberg TV

• May jobs report not telling the full story
  Matthew Nestler, a senior economist with KPMG, told NewsNation that even though the numbers this month exceeded expectations, the raw number is not telling the full story because there is a “soft underbelly” that shows cracks starting to form in the foundation of the labor market. “The job reports aren’t also fully incorporating cuts at the federal government level, so those on administrative leave or severance pay may not show up until October,” Nestler said. “Though the unemployment rate stayed at 4.2%, it stayed for all the wrong reasons.” Nestler added the steady unemployment rate was due to a drop in participation, especially among foreign-born workers and that the country is already seeing the impact of immigration crackdowns on employment with a decrease in roles in elder care industry positions over the past few months.
  June 06, 2025 | News Nation

• Eldercare Employment Is Under Stress. Immigration Curbs Are Why
  "Employment in eldercare industries is weakening due to the administration's restrictive immigration policy," Nestler wrote on Friday. If hiring keeps slowing down, that could be a problem for companies in the sector, as well as for the overall job market. "The administration's immigration policy shift is weakening employment in home healthcare and eldercare facilities," Nestler said. "Demand has not suddenly dropped for these eldercare services given aging demographics. "Nestler expects the labor supply issues will lead to worker shortages sooner rather than later, driving up the cost of care and potentially leading to challenges for those designated as caregivers within families.
  June 06, 2025 | Barron’s

• MarketWatch: Trump signs order imposing 50% tariffs for steel, aluminum. Why economists are dismayed
  Diane Swonk, chief economist at KPMG U.S., warned in a social-media post that a Federal Reserve study found that Trump's steel tariffs in 2018 and 2019 pushed up input costs so much that jobs saved in the steel industry were more than offset by losses in overall manufacturing employment. She suggested that the effects this year might be even worse, saying: "Now double steel tariffs & combine them with more tariffs."
  June 03, 2025 | MarketWatch