IMF Flags Emerging Strains in U.S. Economy

The IMF warned Thursday that the U.S. economy is starting to show signs of strain after years of resilience, citing easing domestic demand and slowing job growth. IMF spokesperson Julie Kozack said inflation remains on track toward the Fed’s 2% target but faces upside risks from tariffs imposed under the Trump administration. She noted that front-loading of imports ahead of tariffs had fueled volatility in early 2025 and that tariffs were now contributing to inflation risks. The IMF sees scope for Fed rate cuts but urged caution and reliance on incoming data. Kozack also highlighted that the U.S. government’s recent revision showing 911,000 fewer jobs created in the 12 months through March was “a bit larger” than average, suggesting employment was already stalling before the tariff hikes. She said the factors behind the revision will be assessed in the IMF’s scheduled review of the U.S. economy in November.