What Is Going On With This Economy?

Today I saw several friends at a business lunch. As usual, we caught up on recent events, family, and business. Almost without notice, the conversation turned to the economy where a small group of CEOs all shared the same sentiment… what is going on with this economy?

We are all busy… very busy. Everyone is working so hard and yet the results just aren’t there. Since Advanced Resources is focused on supporting both HR and Accounting and Finance leadership, I felt the imperative to share our perspective on the economy as it relates to the job market.

Just as we began to exhale after months of election-driven uncertainty, businesses were finally showing signs of optimism. Economic indicators were ticking upward, hiring plans were beginning to solidify, and overall business sentiment was improving. However, just as quickly as momentum began to build, a new wave of uncertainty has swept through the market—this time driven by the looming threat and reality of tariffs.

Trade policies, particularly tariffs, have long been economic levers with widespread ripple effects. While intended to protect domestic industries, tariffs often introduce complexity, increasing costs for businesses and consumers alike. As companies brace for potential cost increases, many are putting expansion and hiring plans on pause. This uncertainty is beginning to impact the job market in real time, with Q1 of 2025 already showing signs of slowing demand in key industries.

Adding to this economic hesitation is the uncertainty around interest rates. While investment bankers, private equity firms, and strategic leaders are eager to deploy capital and invest in growth, the fluctuating interest rate environment is acting as a damp blanket on investment potential. The lack of clarity on where rates will settle has many organizations delaying key decisions, impacting mergers and acquisitions, expansion efforts, and hiring plans.

The Immediate Impact on Q1 Hiring

At the start of 2025, hiring appeared poised for a rebound. Businesses that had held off on major workforce investments during the election cycle were eager to push forward. Yet, as concerns over trade policies and interest rates intensified, many organizations have shifted to a "wait-and-see" approach. Here’s what we are seeing so far:

• Cautious Hiring in Manufacturing and Supply Chain – Companies directly impacted by tariffs on raw materials and goods are being especially cautious. Many are choosing to delay hiring for full-time roles, opting instead for project-based consultants to manage fluctuations.
• Tech and Professional Services Still Moving Forward—For Now – While some industries are feeling the strain, sectors like tech, finance, and consulting are continuing to see strong demand for specialized talent. However, hiring in these sectors could slow later in the year if economic uncertainty persists.
• Retail and Consumer Goods Bracing for Impact – Rising costs due to tariffs could squeeze margins in retail, potentially leading to a slowdown in hiring for corporate roles in consumer goods and e-commerce.

What to Expect in the Remaining Three Quarters of 2025

As we look ahead, the trajectory of the job market will hinge on a few key economic factors:

• Q2: The Market Holds Its Breath – The second quarter will likely be a period of recalibration. Businesses will analyze the impact of tariffs on costs and demand, as well as monitor interest rate trends, before making any major workforce decisions. Expect continued hesitancy in permanent hiring, with a greater reliance on interim and project-based workers.
• Q3: Stabilization or Further Slowdown? – By mid-year, we will see whether businesses have absorbed the new cost structures or if they are forced to reduce expenses further, which could mean hiring freezes or even layoffs in some sectors. If consumer spending remains strong and interest rates stabilize, we may see some stabilization in hiring.
• Q4: A Push Toward Growth? – If inflation remains in check, interest rates become more predictable, and businesses have adjusted to new trade policies, hiring could rebound in Q4 as companies look to end the year on a strong note. However, if uncertainty lingers, we may see continued caution, with organizations investing more in operational efficiency rather than workforce expansion.

What It Means for Employers and Job Seekers

For employers, adaptability will be key. Businesses may need to rethink their workforce strategies, leveraging flexible talent solutions to maintain momentum without committing to long-term hires amid economic uncertainty.

For job seekers, agility and skill development will be critical. Those willing to explore contract or consulting opportunities may find more doors open to them in the near term, particularly in industries where companies need expertise but are hesitant to commit to full-time employees.

Final Thoughts

The start of 2025 is shaping up to be a year of economic whiplash—just as confidence was returning, new concerns have emerged. While no one can predict exactly how tariffs, interest rates, and broader economic shifts will play out, one thing is clear: businesses and job seekers alike must remain flexible and proactive. As always, those who are prepared to pivot will be best positioned to navigate uncertainty and emerge stronger on the other side.

About Advanced Resources

Advanced Resources partners with leading organizations providing solutions and staffing services to address specific challenges directly impacting human resources and accounting & finance.

Over the past 30+ years, Advanced Resources has been recognized as a perennial Top Workplace while helping clients secure the best talent to meet their strategic goals.

The team of Advanced Resources is comprised of accomplished industry professionals that understand people are the heart of all organizations. Advanced Resources offers a personalized approach and proven processes to help with strategy execution.

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