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Rising Prices Could Trigger Layoffs, Warns Morgan Stanley

12/25/2025

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Summary

Story summary

Morgan Stanley warns that consumer resistance to rising prices could trigger layoffs if profitability erodes.
Michael T. Gapen, Chief U.S. Economist at Morgan Stanley, says the job market is tough and 2026 layoffs may be avoided if firms raise prices.
Tariff pressures have driven price increases through 2025 and Morgan Stanley expects core inflation to reach 3% in early 2026, depending on consumer acceptance.

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Story summary

Morgan Stanley warns that consumer resistance to rising prices could trigger layoffs if profitability erodes.
Michael T. Gapen, Chief U.S. Economist at Morgan Stanley, says the job market is tough and 2026 layoffs may be avoided if firms raise prices.
Tariff pressures have driven price increases through 2025 and Morgan Stanley expects core inflation to reach 3% in early 2026, depending on consumer acceptance.