After a strong 2024, the US economy lost momentum at the start of 2025 as consumer fatigue set in and the trade deficit widened due to a tariff-fueled rush for imports.
The government’s first estimate for Q1 GDP is projected to show an annualized growth rate of just 0.4%, the weakest in nearly three years. Financial markets, already sensitive to signs of weakness, could see rising fears of recession and job market instability.
Key Highlights:
- Hiring remains steady; April’s jobs report is forecast to show 130,000 new jobs, though slower than March.
- Unemployment rate expected to stay at 4.2%.
- Business investment in commercial aircraft may boost GDP, but corporate spending has slowed amid tariff uncertainty.
According to Bloomberg’s monthly survey, GDP growth is expected to stay below 1% for the first three quarters of 2025, as businesses cut private investment and cautious consumers tighten spending.
Other Major Data:
- Personal consumption and income reports are expected to show strong March spending but cooler income growth.
- The Fed’s preferred inflation measure — core PCE — is forecast to rise 2.6%, the smallest gain since June.
Meanwhile, markets are also watching:
- China’s PMIs, European economic data, and Canada’s election.
Central banks in Japan, Hungary, Chile, and Colombia are expected to hold rates steady, while Thailand may cut.