Labor Market Like a Deer in the Headlights Waiting for More Predictable Economic Policy

The Trump administration has sharply curtailed federal data collection and reporting, leaving us to rely on less accurate and less consistent sources to judge the economy. What those sources suggest so far is that two things have happened in Trump’s first year: hiring has slowed, and separations (layoffs, firings, quits) have also slowed. That’s good news for people who might otherwise have lost their jobs, but bad news for people hoping to find one.

When I began driving, my mother gave me simple advice: drive in a way that makes it easy for other drivers to predict what you’ll do. I later realized how wise that was. When the drivers around you can anticipate your moves, they can adjust smoothly—and you can adjust to them. Collisions avoided. (At least for the first half-century of my driving. All bets are off in my dotage.)

Which brings me back to the labor market.

Trump’s tariffs are currently being challenged in court, and betting markets put the odds of them surviving at roughly one in four. In other words, we have tariffs—for now—but there’s a decent chance they disappear soon.

Tariffs are no small thing. Yet businesses largely aren’t raising prices to offset them (why alienate customers over a cost that may vanish?). Nor are many firms hiring or firing aggressively to adapt—because the tariffs themselves may be temporary.

The result is a kind of economic hesitation. Businesses aren’t moving forward confidently under “business as usual.” They’re also not retooling their operations for a genuinely new normal. Instead, they’re waiting.

One often-overlooked role of government is predictability. Regulations that affect decisions involving millions or billions of dollars can’t reasonably change every six months, and then change again six months later. Firms don’t invest, hire, or expand in an environment where the rules of the road are unknowable.

Start driving as if there’s a bee loose in the car, and traffic grinds down. Accidents become more likely. Something similar happens when economic policy becomes unpredictable: businesses slow rather than move confidently into the future.

In theory, we may know within weeks whether the courts uphold Trump’s tariffs and, by extension, whether they affirm that Congress still has a central role in economic policy, rather than allowing presidents to levy taxes unilaterally. Until then, a key element of the economy is unpredictable. Companies hesitate. Hiring stalls. And workers, like the rest of us, remain in limbo.