Something may not be quite right in the U.S. economy, and it’s not just a one-off jobs report that points to that.

All the noise around the August Bureau of Labor Statistics report was about President Donald Trump‘s subsequent firing of its former chief, Erika McEntarfer. However, the report showed significantly lower hiring than expected. Sober judges of the current U.S. economic trajectory say the reported figures, combined with other indicators, suggest slower growth in the short-term and perhaps even worse in the longer run.

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The Trump administration‘s infamous tariffs are undoubtedly playing their part, mainly perhaps because they create such uncertainty. However, they are also beginning to raise prices on consumer goods.

In addition, home sales activity is running at what some observers call a sluggish pace, while credit card debt is also rising.

“The latest jobs report was certainly slower than expected, so we will need to see if this becomes a trend or is just a one-off report,” said Thomas Aiello, senior director of government affairs at the National Taxpayers Union. “But this data, combined with the fact that both consumer spending and domestic investment are slowing, should give us some concern that there is something off in the economy.”

Uncertainty is the big issue

Economists may be divided on exactly how much influence the tariff agenda is having. However, nearly all agree that the uncertainty it creates is not good for the economy.

Such uncertainty is fueling a trend of downward employment, which is occurring for multiple reasons, not least the effects that mass deportations are having on the labor force.

“This includes an aging workforce, deportations, and declining labor participation rates,” said Javier Palomarez, founder and CEO of the United States Hispanic Business Council.

The deportation policy and the focus on reducing immigration generally may have an ultimately greater effect than the tariffs, longer-term, argued Lee Branstetter, professor of economics at Carnegie Mellon University’s Heinz College.

In the short-term, he said, a more likely result is a combination of elevated inflation and slower growth, otherwise known as “stagflation.”

Looking further ahead, the firing of McEntarfer may also signal greater uncertainty in how to view economic performance going forward because there could be far less confidence that what is being presented is actually an accurate reflection of the economy, especially if it leads to further rubbishing of official data.

“Political interference with the Federal Reserve and the official statistical agencies could lead to both dramatically higher inflation in the long run and much greater uncertainty about the future,” Branstetter said.

Michael Ashley Schulman, partner and chief investment officer of Running Point Capital Advisors, a Californian investment group, said with such uncertainty around the viability of future reported economic data, investors will now have to price in a new political interference premium.

“If headline numbers can be revised by tweet, the confidence interval widens faster than a K-pop single tumbling down the Billboard Hot 100,” he said. “Domestically, that means bigger volatility around payroll Friday and wider bid-ask spreads as traders second-guess the stats.”

The skepticism of observers of the U.S. economy from the outside will also increase, leading to more global uncertainty.

“Overseas, economists and asset managers who once treated U.S. figures as the lodestar of global data may start reading them like tarot cards — interesting, but no longer the definitive reference,” he said.

The near and the far

While most economists are not signaling a possible recession anytime soon, Greg Willett, chief economist at housing insurance group LeaseLock, thinks there is the “potential for a mild recession to emerge in the near term.” Most or all agree that prospects for growth are slim.

There are multiple factors at play, but it would certainly help stabilize things and lessen possible negative economic effects if the tariff agenda were dropped.

If they stay in place, Branstetter said, research suggests that higher prices could depress consumer income by $2,000-$3,000 per year on average.

“The best way to immediately help businesses would be to drop the misguided tariff agenda,” Aiello said. “This trade war is hitting Main Street hard because it is raising costs for businesses, making it harder to operate and sell their products abroad.”

Add that to the concerns over a shrinking labor force, and you have a heady brew.

“In almost every industry, small businesses — who create two-thirds of all new jobs — are hesitant to invest, grow, expand, and hire amidst an uncertain economic future,” Hernandez said.

Such a brew could get even heavier if suspect economic data amid political interference is also added to the mix.

“These changes, if they occur, could have very significant depressing effects on growth in the longer run — and the negative impact on stock market valuations could come much sooner,” Branstetter said.

The next several weeks could be crucial, with inflation data, retail sales, and producer prices all set to land, not to mention another employment statistics report after the firing of McEntarfer.

“Markets are watching small business sentiment, new unemployment claims, and manufacturing activity,” said Irina Tsukerman, president of consultancy Scarab Rising. “These are the early warning systems. Right now, they are flashing yellow. If these indicators deteriorate, the talk of a soft landing will disappear. Investors will start looking at longer-term stagnation and a deeper economic reset.”

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The problem may, therefore, be erosion rather than an eventual economic crash. While there may be no immediate catalyst for a sharp downturn, there is equally no fuel for any rebound, Tsukerman added.

“The question is not whether the economy can avoid a recession,” she said. “The question is whether it can avoid mediocrity becoming the new normal.”

Nick Thomas is a writer based in Denver.