U.S. Economy This Week, April 29, 2025: Shaky, Soon to Be Stirred
While the president's actions have been roiling the markets, the numbers indicate soundness awaiting greater confidence from businesses and consumers.
Guest post by economist Robert Genetski, Ph.D.
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The news on the U.S. economy this past week was relatively positive. In addition to presidential actions marking some relief from tariffs, there was a sharp 9% surge in March in new orders for durable goods. The increase in this highly volatile series was due to aircraft orders. Other than aircraft and defense, new orders were little changed.
S&P’s advance business survey for early April indicates the economy continues to grow, but only slightly. The composite reading was 51, slightly above break-even at 50. Inflation remained high.
On Friday, the University of Michigan released the bad news from its final estimate on
consumer sentiment and inflation expectations. It showed a major decline in consumer sentiment, falling “a precipitous 32% since January, the steepest three-month percentage decline seen since the 1990 recession.” In addition, “Year-ahead inflation expectations surged from 5.0% last month to 6.5% this month, the highest reading since 1981 and marking four consecutive months of unusually large increases of 0.5 percentage points or more.”
Source: “Surveys of Consumers, University of Michigan”
Tomorrow, the first quarter GDP report will show what happened to the economy from the third quarter of 2024 into the first quarter of 2025. This report also will include important monthly data for March.
With all the changes in the economy, there is a great deal of uncertainty. Estimates of real growth range from a low of -2½% to +2%. The currently available monthly data for February point toward total spending and income up at a 4% annual rate, GDP inflation at 3%, and real growth at 1%.
Regardless of the numbers, the real questions are what is happening now and what will happen in the months ahead.
Although we still have concerns over monetary policy, we expect the economy will be relatively stable in both the first and second quarters and look for a recovery in the second half of the year.