Business investment to slow; Federal cuts leave younger workers at risk

Economic challenges including uncertainties over trade tariffs could cause a significant pullback later this year in business investment in the U.S. and other countries, according to a report from Oxford Economics. The economic forecasting firm said investment could rebound in early 2026, depending on the duration and effects of current and pending trade tariffs being imposed by the Trump administration.

Under most potential scenarios, “investment is markedly weaker this year,” with declines estimated at about 4% in the U.S. and China, and about 2% in the Eurozone and United Kingdom, according to the report from Oxford economists Michael Saunders and Daniel Harenberg. Drops in business investment could have larger ripple effects for economic growth.

“If trade policy uncertainty remains elevated this year and declines more gradually thereafter, it will cause greater economic harm beyond this year, presenting downside risks to our growth forecasts,” the report said. Heightened uncertainty over the next few years could drag down global investment by 10% to 20% across major economies.

Younger workers face particular challenges in a tight employment market that is now being upended by ongoing federal government cost-cutting, according to a report from the Conference Board.

The New York-based economic research group said younger federal workers are disproportionally affected as job reductions first target probationary and other entry-level workers with the lowest tenures in their positions. While just 7% of the overall federal workforce is under age 30, about 27% of probationary federal employees fall within that age group.

Many of the younger displaced federal workers will be competing against displaced older and more experienced workers shifting to the private sector or state and local government to find work. Planned job cuts and office closings at several federal agencies could affect more than 200,000 workers, though some reductions are being challenged in court.