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What the F is actually going on in the economy this month?!

Let's break it down 👇

Here's your monthly breakdown of some of the big stories and trends in the economy right now so you can get informed while you get rich.

TLDR

• Rising costs due to tariffs are expected to cost the average household $2,400 a year.
• New tariff rates announced will likely push up prices for food, clothes, and cars.
• Unemployment hit 4.2% and hiring slowed
• Travel, snacks, and retail spending dipped; secondhand shopping, budget dining, and AI investment rose.
• Major stock market indexes are up, and AI stocks soar

So... are tariffs still a thing?

They sure are. In fact, in the past few weeks, there has been a flurry of updated tariff rates for many countries.

Some nations, like South Korea, the U.K., and the E.U., have struck deals with the U.S. for tariffs often around 15%, which is lower than what Trump initially threatened. Other tariffs are being used to penalize countries, like the 25% tariff on India for importing Russian oil - an attempt to force Russia to end the war in Ukraine.

So what do these actually mean for us? A tariff on goods from another country means that when American companies import those goods, to resell them here or to use them in the production of their product, they will be charged a tax (tariff) at import. This makes it more expensive to import, which can result in 3 things:

• American companies buy less of that good, which lowers profits for the other country and lowers supply in the U.S.
• American companies choose to produce somewhere cheaper or in the U.S. - except the U.S. doesn't have the ability to produce most of these goods, and creating the infrastructure is extremely expensive and time-intensive.
• American companies continue buying at that higher cost, and either pass the cost on to the consumer with higher prices or cut costs in other ways, like layoffs.

You can view a Tariff map, based on the list of tariffs on the White House website, that shows all the tariffs placed on every country across different categories.

But are they actually impacting prices?

Up until now, consumers have primarily not been impacted by tariffs because many companies stockpiled on supply, moved production, or have been absorbing the additional cost so far.

So far, the tariffs have brought in an estimated $30 billion, which translates to corporations paying an additional $30 billion to import their goods. Unless capitalism isn't capitalism-ing anymore, they are not going to continue to pay those increased costs out of pocket without taking action to increase their revenue (that's where you come in). And with prices rising 2.6% in June, experts say we are beginning to see the effects on the economy. Where are we expecting the biggest price hikes, you ask?

• ​Food and drink, especially items like coffee, bananas, fish, beer, wine, and liquor.
• Clothes and shoes - increases of 37-39% are expected.
• Cars - automakers aren't passing off costs yet, but they're already seeing a drop in profits​

What about jobs?

• Unemployment rose to 4.2% in July, the highest in nearly three years. The U.S. added only 73,000 jobs, far below expectations.
• On top of that, earlier job numbers for May and June were revised down by 258,000, showing the job market is weaker than we thought.

Why it matters: Even a small rise in unemployment can signal slowing growth—especially when hiring is already missing the mark.

These numbers are less than stellar. Trump thought so too. That's why he fired the head of the Bureau of Labor Statistics hours after the report came out, claiming (without proof) the numbers were manipulated. Economists say the BLS is independent and that these types of revisions are normal. Critics warn that moves like this could hurt trust in U.S. economic data.

Spending trends: what's up & what's down

Down:

• Travel. This summer saw a dip in domestic flying and more future trips being cancelled or modified. While wealthy travelers are not decreasing travel, low- and middle-class consumers are cutting back more.
• Breakfast & Snacks - Food companies are reporting decreased spending on snacks, and companies like McDonald's are seeing low-income customers, who are their most price-sensitive, skiping out on breakfast.
• Clothing & Shoes - Crocs reported that sales would decline in the current quarter, as it expects to take a $90 mil hit annually from tariffs. Their share price dropped 29% after their earnings report.

Up:

• ThredUp, a clothes re-selling platform, saw an increase in share price of 7.2%, largely driven by a 72% increase in new customers. Increased interest in second-hand buying can indicate economic concern.
• Restaurant spending: It may seem counterintuitive, but studies show that during hard times, consumers don't actually stop eating out. They just shift to cheaper restaurants. So while overall restaurant spending isn't down, individual consumer spending is, as people dine out with deals.
• AI - Not consumers, but companies, are massively spending on AI. Google is talking about spending $85 million on AI this year.

How's the stock market doing?

Although there is still some volatility around tariffs, the market is not reacting as strongly as it did to Liberation Day.

Major index funds closed high on Friday. These three major indices encompass thousands of companies across multiple industries - making them great indicators of the overall stock market’s health:

• S&P 500 added 2.4%
• DOW climbed 1.3%
• NASDAQ soared 3.9%, hitting a new record high

Consumers continue to pour money into AI-related stocks:

• Nvidia - the chipmaker powering most AI technologies - became the first public company to surpass a $4 trillion market cap, reflecting massive investor optimism around AI.
• Apple announced it’s boosting its U.S. manufacturing investment by $100 billion, bringing its total commitment to $600 billion over four years. This came as Trump announced that iPhones will be exempt from a looming 100% tariff on chips. Apple stock responded with a 13% jump (estimates vary between 4–13%)

There’s a potential major IPO on the horizon:

• The Trump administration is considering taking Fannie Mae and Freddie Mac public through an initial public offering (IPO). Together, these two government-backed mortgage companies could raise about $30 billion. Both have been under government conservatorship since the 2008 financial crisis. If they return to private ownership, the change could influence mortgage rates - potentially increasing them if government guarantees are reduced.

And the latest on meme-driven market moves:

• What’s a meme stock? A stock that gains popularity - and often wild price swings - because of social media hype, viral content, or online communities rather than company fundamentals. Think GameStop and AMC during the 2021 Reddit frenzy.
• American Eagle’s stock surged 15% initially after launching an ad campaign featuring Sydney Sweeney with a “genes vs. jeans” pun, thanks to meme-driven traders. It then fell 10% after backlash. After Trump praised the ad, the stock jumped back up.

Who's winning and who's losing in this economy?

Here's the scoreboard as of now.

The Winners:

• Corporations, especially tech and AI: While they're experiencing increased costs right now, they won't just accept those forever. And with the Big, Beautiful Bill, they're getting some tax breaks that soften the blow.

The Losers:

• People near the poverty line: Increasing costs are going to hit lower-income folks the hardest. And Medicaid cuts to that and the picture ain't pretty!

Even in a volatile economy, knowledge is power. Use these updates to stay ahead of changes, protect your budget, and spot opportunities others might miss. Keep an eye out for next month's Hot Girl Econ 101.

Wishing you a rich life,

Lora at She's a Lot