Macro Hive Conversations With Bilal Hafeez Ep. 319: Phil Suttle on Slowing US, Delayed Tariff Impacts and China Investment
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Jul 31, 2025 Phil Suttle, founder of Suttle Economics and former senior economist at notable financial institutions, shares his insights on the current US economic landscape. He discusses the US labor supply issues and their impact on economic growth and consumer behavior. Suttle dives into the effects of fiscal policies and tariffs, as well as the Federal Reserve's cautious approach to monetary policy. He also analyzes China's economic role and its implications for Asian markets, offering a nuanced view of global economic dynamics.
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US Growth Slowed by Labor Decline
- US growth is stuck below trend mainly due to a declining labor supply which began in 2023.
- This labor force contraction is cutting potential growth by about a percent point.
Tariffs vs Service Sector Weakness
- Tariffs have increased goods prices but profits have absorbed some of that impact so far.
- Surprisingly, service sector pricing and consumer spending remain weak, offsetting tariff inflation pressures.
Regressive Policies Squeeze Demand
- The US is undergoing a regressive policy shift, squeezing poorer households who have high spending propensities.
- This suppresses discretionary demand, especially hurting service sectors and slowing growth.