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The analysis suggests a measure of hidden weakness in what has widely been seen as a solid labor market that is now coming under pressure from the Trump administration's massive tariffs, which have raised the twin risks of higher inflation and higher unemployment. In the lead-up to many past recessions, it has been typical for people who are out of work to take longer and longer to find a job, and to spend an increasing amount of time among the ranks of the unemployed, the authors of the regional Fed bank's latest Economic Letter found. "In the past, such patterns frequently occurred during the onset of recessions, suggesting that these developments could be signs of rising recession risk," the Letter's four co-authors wrote.

President Donald Trump on Monday suggested that he might temporarily exempt the auto industry from tariffs he previously imposed on the sector, to give carmakers time to adjust their supply chains. “I’m looking at something to help some of the car companies with it,” Trump told reporters gathered in the Oval Office. Matt Blunt, president of American Automotive Policy Council, an association representing Ford, General Motors and Stellantis, said the group shared Trump's goals of increased domestic production.

The Buffalo, New York-based bank also said Monday that the commercial real estate lending market has started showing signs of life, but that the renewed competition is crimping its loan growth.

Oil prices are forecast to continue falling in 2025, but the drop will need to be even more dramatic than expected for the Trump administration to step in and support markets.

After Treasury Secretary Scott Bessent appeared to take the lead on trade negotiations, Wood turned bullish on the president’s tariff regime.

The rise in price pressures will prove short-lived, according to a survey of economists. Still, inflation will likely persist above the Federal Reserve’s 2% target through next year.

The Organization of the Petroleum Exporting Countries reduced its oil-demand outlook for this year and next, citing the impact of U.S. tariffs.