By M. Ray Perryman, PhD, CEO and President – The Perryman Group
Outlook for the US Economy – 2nd Quarter 2025
By M. Ray Perryman, PhD, CEO and President
The Perryman Group
Employment
The United States economy gained 1.753 million net new jobs over the twelve-month period ending June 2025 for an annual employment growth rate of 1.10%. Over the past year, the educational services, health care, and social assistance industries featured both the largest increases in workers (866,000) and the highest rise in percentage terms (3.30%). Some industries did shed jobs, however, with the largest losses in the manufacturing sector, down -92,000 workers from June 2024 to June 2025.
The nation’s seasonally adjusted unemployment rate in June was 4.12%, up 0.041 percentage points from a year prior, but down slightly from the past few months. One reason for the decline is that the size of the civilian labor force has decreased over the past several months, partially in response to people leaving the country (though it remains larger than this time last year).
Inflation
Recent data has begun to show some effects of tariffs, with prices rising particularly for imported products. However, price declines in other segments such as services and air fares contributed to a smaller increase in overall rates than would have occurred otherwise. As a result, inflation is only trending up modestly at present but will escalate if current and threatened tariffs are implemented and sustained. Modest signs of weakness are emerging in the job market, despite continued hiring at a reasonable pace.
Economy
Uncertainty continues to be a drag on the economy, but the resilience of US business activity thus far held firm. Nonetheless, with key inputs to manufacturing and construction (such as copper and other metals) now priced much higher than in the recent past, it could be only a matter of time before these industries experience notable adverse effects.
On balance, The Perryman Group’s most recent projections call for growth over the next two years, though at a slower pace than previously projected and with a wider confidence interval. Real gross product is expected to expand by +1.13% this year on a year-over-year basis, with +2.03% growth in 2026. Job gains are projected to be about 1.4 million through 2025, with an increase of 1.6 million jobs next year.
About Dr. M. Ray Perryman and the Perryman Group
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.