“The labor market has moved front and center for the Federal Reserve, highlighting its fragility and risk to the economy,” the Wall Street Journal reports

“The good news is that unemployment remains low, and employers haven’t been all that interested in laying people off. The bad news is that companies haven’t been all that interested in hiring, either.”

“This precarious situation means even a relatively small increase in layoffs could lead the economy to start shedding jobs—a process that can be difficult to reverse once it starts.”

Wall Street Journal: “It is a tough spot for these Republican lawmakers to be in. Criticism of the president’s policies could earn a public rebuke from the White House. But embracing the new duties could be politically risky: Voters disapprove of the president’s handling of the economy, inflation, and tariffs.”

“There’s at least one senator supportive of President Donald Trump’s negotiations to take a government stake in chip maker Intel: Bernie Sanders (I-VT),” Punchbowl News reports.

“The Trump administration revealed this week that it is working to turn CHIPS Act grants Intel received into equity in the company. Commerce Secretary Howard Lutnick told CNBC such a move will ensure the federal government gets ‘a good return for the American taxpayer instead of just giving grants away.'”

“Here’s the thing, though: this idea was first proposed by Sanders and Sen. Elizabeth Warren (D-MA).”

“Car buyers are likely to pay more this fall as tariffs begin to drive up sticker prices — and not just on imported vehicles,” Axios reports.

“Automakers can’t eat the cost of tariffs forever, and September is a convenient time to adjust prices, as the 2026 models begin arriving in showrooms.”

“It might not be obvious: Lower-priced trim levels could be eliminated, for example, or desirable features might be rolled into expensive option packages. Be on the lookout, too, for higher destination fees — add-on dealer delivery charges that aren’t part of the manufacturer’s suggested retail price.”

Ken Rogoff: “With long-term interest rates up sharply, public debt nearing its post–World War II peak, foreign investors becoming more skittish, and politicians showing little appetite for reining in fresh borrowing, the possibility of a once-in-a-century U.S. debt crisis no longer seems far-fetched. Debt and financial crisis tend to occur precisely when a country’s fiscal situation is already precarious, its interest rates are high, its political situation is paralyzed, and a shock catches policymakers on the back foot.”

“The United States already checks the first three boxes; all that is missing is the shock.”

“The corporate pricing dam is cracking — companies are raising prices, or signaling that increases are coming, to absorb some of the costs of the Trump administration’s tariffs,” Axios reports.

“Americans are already under strain from rapidly rising prices during the Biden administration. Another bout of hot inflation — at a time when the labor market is slowing down — will hurt.”

“You can’t run a country, or any organization, without reliable data, and firing the head of a statistics agency because you don’t like the numbers it produces starts a path the United States does not want to go down. At the other end lies a ruined economy and a damaged democracy.”

– Andreas Georgiou, former head of the Greek national statistical office, quoted by the New York Times.

“Job growth slowed down substantially this summer. What we don’t know for sure is why,” Axios reports.

“If the jobs slowdown is due to less labor supply, thanks in part to restrictionist immigration policy, then it’s nothing to worry about. If it is because employers are more reluctant to hire, then it’s an early warning that the economy needs monetary stimulus.”

“In other words, we could be in the early stages of a labor market downturn, which could justify the kinds of aggressive interest rate cutting the Trump administration seeks.”

“Or we could just be seeing the inverse of the situation faced in 2023 and the first half of 2024, when high immigration rates unduly flattered the payrolls numbers, masking a deterioration in the health of the labor market. That would imply no rate cutting is needed.”

“At the moment, the American economy feels a little bit like a hot August afternoon. The air is heavy and still, as lightning flashes on the horizon. The storm could sweep through and leave destruction in its wake. It could set in for a brief drizzle,” the New York Times reports.

“Or it could pass by in the distance, and take its fury elsewhere.”

“In this very humid metaphor, the electricity in the sky is the steep tariffs that President Trump has now imposed on most goods coming into the United States. It’s also his strict immigration curbs, mass firings of government employees and the pullback in government spending.”

A new Echelon Insights poll finds 36% of voters think the economy is improving while 49% think it’s getting worse.

But President Trump’s approval rating is a surprisingly high 47% to 51%.

“Trump administration officials are discussing taking a 10% stake in Intel as part of a government effort to rescue the embattled chip maker and bolster semiconductor manufacturing in the U.S.,” the Wall Street Journal reports.

“The structure and terms of the equity investment haven’t been finalized, but the conversations add to a dramatic saga unfolding for the company in Washington.”

“D.C. restaurants saw a more than 25% drop in diners in the days following President Donald Trump’s takeover of the city’s police department,” WUSA reports.

“Americans haven’t been this gloomy about the job market since the Great Recession,” Axios reports.

“Fears about joblessness have surged since President Trump unveiled plans to impose steep tariffs on foreign goods.”

“The economy might have hit a soft patch, but it has so far dodged the bleak predictions from a few months ago. Consumers are still bracing for the worst to come.”

“U.S. consumer sentiment softened in August as households anticipated higher goods prices because of import tariffs,” Reuters reports.

From the Wall Street Journal editorial board:

“Inflation is a broad-based, persistent increase in the general price level. Tariffs in that sense aren’t inflationary unless the Fed accommodates them with over-easy monetary policy. But tariffs do raise prices on tariffed goods, which can mean a one-time surge with some potential downstream effects. What matters for voters, and for their confidence in the economy, is what they see in their own paychecks and cost of living.”

“Republicans are in the political danger zone if tariffs cause price increases—one-off or persistent—that aren’t offset by bigger wage gains. Republicans will make the same mistake as the Biden Administration if they keep telling voters everything is fabulous but the evidence at the grocery store or Applebee’s tells them something different.”

Wall Street Journal: “People are moving to new homes and new cities at around the lowest rate on record. Companies have fewer roles for entry-level workers trying to launch their lives. Workers who do have jobs are hanging on to them. Economists worry the phenomenon is putting some of the country’s trademark dynamism at risk.”

“The highest tariffs in almost a century haven’t caused inflation to surge. The phenomenon has puzzled economists, some of whom suspect that companies have so far simply been reluctant to pass along the extra costs to their customers,” the Wall Street Journal reports.

“But another argument for the limited impact is gaining traction: that tariffs being paid by importers are lower than advertised.”