Watchwords for NH economy: ‘Uncertainty rules’

Brian Gottlob uses these words to describe the state’s current economic climate: “Uncertainty rules.”

In a recent presentation to the Greater Manchester Chamber and in a conversation with NHBR, the director of the New Hampshire Employment Security’s Economic and Labor Market Information Bureau raised several issues — from immigration and unemployment, to housing prices and consumer spending — as reasons for both hope and concern for the economy into 2026.

When Gottlob assesses where the economy is going, he said he looks primarily at three data points: Unemployment claims, consumer spending and income growth.

Brian Gottlob, director of the state Employment Security’s Economic and Labor Market Information Bureau, makes a point during his presentation on the state’s economic health to the Greater Manchester Chamber of Commerce’s “Access 2025” event Sept. 16. (Courtesy photo)

The overriding issue that could affect all three at this point is tariffs, Gottlob says. In New Hampshire, tariffs imposed by the Trump Administration on the country’s trading partners, especially Canada, are having an effect locally.

Exports to Canada from New Hampshire have dropped by 42% this year, according to Gottlob, affecting businesses that produce the exported goods.

Canadians have responded to these tariffs — and Trump chatter of making Canada the 51st state — with retaliatory tariffs and by staying away from the U.S.

Daytrip and overnight visits from Canada to New Hampshire have dropped through 2025, affecting the hospitality industry here, especially during the summer tourist season. According to Gottlob, Canadian daytrips were down 46.8% in June, 49.5% in July, and 40.4% in August. Overnight trips were down 41.1% in June, 49.3% in July, and 46.7% in August.

“From my perspective, there isn’t much good about tariffs at all,” Gottlob said.

Gottlob sees the effective tariff rate as being 15%. The effective tariff rate is a measure of the average tariff imposed on imports, calculated by dividing the total value of customs duties collected by the total value of imports.

“I think people are finally starting to realize that we’re probably stuck in this 15% range, effective tariff rate overall,” Gottlob said. “I think initially people thought: Oh, those things won’t last. I think they’re starting to realize it’s going to be in effect for as long as this administration is around. And, if that’s the case, you know, we’ve got a plan for that.”

Gottlob’s presentation to the chamber showed that, yes, consumers are still spending, but the pace of that spending has slowed as prices rise and income growth slows.

The overall effect is a slowed — not stalled — economy, he said.

While Gottlob acknowledged that New Hampshire’s unemployed percentage is up by a half percent so far this year, he said he looks more closely at the number of people making unemployment compensation claims.

“The thing that would make me that makes me nervous is when I start seeing unemployment claims rise and start to rise pretty quickly,” Gottlob says. That hasn’t been happening, he added, noting that new claims for unemployment are at historic lows: 0.26% as a percentage of unemployment.

The slower job growth in the Granite State as reflected by its unemployment numbers are the result of a lack of hiring, not job cuts, according to Gottlob.

“We’ve seen some people new to the labor force, but they’re coming in at a time when hiring is very slow,” Gottlob said. “That’s the problem with job growth, not the layoffs right now, but the fact that businesses have been much more reticent, reluctant to hire. They postpone some of the hiring, or they’ve kept openings without filling them.”

That circles back to an uncertain economy affected directly by tariffs, he said.

“There is a lot of concern. A lot of decision-making is being put on hold, and one of those decisions may be whether I increase production, whether maybe I temporarily slow down production,” Gottlob said.

“I think the uncertainty is never good for hiring. People will not hire if they don’t know what the business situation is going to look like in a few months.” he added. “Hiring is costly; laying off people is painful; it’s not good for morale. So, rather than do that and take a chance, a lot of businesses will hold off making that hire.”

New Hampshire had the lowest number of announced and actual job cuts in New England from January through August of this year, another sign that job growth here has slowed because of diminished hiring, not because of layoffs, according to Gottlob.

He cited immigration as another cause of economic uncertainty.

“Basically, last year, almost all of the growth in the U.S. labor force was related to foreign born workers. Now that’s starting to reverse,” he said. “That will put price pressures on industries that employ a lot of immigrant workers — construction industry, hospitality industries, agricultural industries, and those are all things that people spend money on.”

Another of the Trump Administration qualifiers for a better economy is lower interest rates. Those were slow to come this year until a recent quarter of a percent reduction.

“No doubt it will help,” Gottlob said. “It’ll help business investment, because that’s pretty interest rate sensitive. It helps certain kinds of industries more than others. Obviously, if you lower interest rates, lower payments for people, it generally helps, the automobile industry theory, it should help a mortgage.”

But he cautions that lower interest rates on mortgages aren’t necessarily a guaranteed spark for increasing the housing supply.

“Whether or not they offset some of the other negative effects of the tariffs and reductions in labor supply is questionable,” Gottlob said.

“I don’t have a problem with them doing it, but they need to do it pretty cautiously to make sure that it doesn’t contribute to or accelerate any inflation,” he added. “Unfortunately, it’s not a slam dunk benefit that it usually is in terms of spurring economic activity because of some of the downside risks.”

His forecast for how the economy will fare into 2026 is clouded by how tariffs and immigration influence job growth. If tariffs continue and if immigration is slowed by enhanced enforcement, then Gottlob believes job growth will continue to slow, inviting inflation.

Gottlob believes the consumer price index (CPI) will rise by 2.8% by the end of 2025, then rise 3.5% in 2026.

Two metro areas in the state — Manchester and Nashua — are doing well to stay above the economic turbulence, in Gottlob’s estimation.

Those Hillsborough County communities have accounted for most of the job growth in the state, according to Gottlob. And their gross domestic product (the measure of the market value of all the goods and services produced within an area) has been growing faster than other regions in the state.

“It has been kind of a steady, upward trend for the Manchester/Nashua economic region, while the remainder of New Hampshire has almost no growth, and has actually been declining a bit over the last four or five months,” Gottlob said. “But the Manchester/Nashua/Hillsborough County region has continued to see some growth. When you separate that out, it basically means that the region has contributed almost all of the growth in 2025.”

In particular, Gottlob pointed to the businesses that have grown in the Millyard complex of commercial buildings, companies such as DEKA Research and Development, United Therapeutics, Autodesk, and the Advanced Regenerative Manufacturing Institute (ARMI).

The defense contractor BAE is also in Hillsborough County.

“Of all the federal cuts that are affecting a lot of industries, or a lot of nonprofits as well, defense isn’t likely to be on the hook for much of that,” Gottlob said. “If anything, they’ll receive some boost.”

The availability of affordable housing — either to own or to rent — can play into the economic health of a region, according to Gottlob.

Manchester and, to a certain extent Nashua, have encouraged efforts to build downtown residential units to own or rent. “Manchester, you know, has paid some attention to offering people a reason why they might want to live in a downtown area,” he said.

He pointed to the Strafford County communities of Dover, Somersworth and Rochester as also paying attention to downtown housing development.

The Portsmouth/Seacoast/Rockingham County area hasn’t fared as well in terms of jobs and economic growth.

“I would say maybe a little less than a decade ago, you could see the Seacoast was really peaking. That’s where so much of New Hampshire’s job growth was occurring,” said Gottlob, noting the emergence of the Pease International Tradeport in Portsmouth as a commercial hub.

“When I look at more recent trends, I see the labor force growing not as fast there,” he said.

Part of the problem is the high cost of living compared to other parts of the state, according to Gottlob.

Housing data bears this out. The median price of a single-family home in Portsmouth in August was $790,000. In Manchester, it was $467,000 and in Nashua it was $550,000. Average monthly rents are $2,733 for Portsmouth, $2,034 for Manchester, and $2,071 for Nashua.

Gottlob, like other housing stakeholders in the state, said restrictive zoning contributes to a region’s more expensive housing. “You decrease affordability the more you restrict housing development,” he said.

Gottlob made his presentation to the Manchester chamber on Sept. 16 as part of its “Access 2025” event at the Double Tree by Hilton hotel. It was entitled “Uncertainty Rules: The Outlook for the U.S. and New Hampshire Economies in 2026.”