The Economy

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? Economic vibes get worse

Data: The Conference Board. Chart: Axios Visuals The economic vibes have taken a decisive turn for the worse over the last several weeks. The big question now is whether actual activity will follow, Axios' Neil Irwin writes. The big picture: This week has brought yet another round of "soft" indicators that show slumping confidence in what lies ahead for the economy amid a fast-changing policy landscape. ? Zoom in: The Conference Board's long-running survey of consumer confidence fell for the fourth straight month in March, the business research group said yesterday — reaching below even its level during peak inflation in 2022. Consumers' near-term outlook for incomes, business, and labor market conditions fell to the lowest in 12 years, and far below the threshold that usually signals a looming recession. The deterioration was sharpest among older Americans. Separately, an index that measures small business owners' confidence, published by the U.S. Chamber of Commerce this morning, fell in the first quarter to about its level of a year ago, erasing a post-election surge. ? Reality check: Confidence surveys have been a flawed predictor of actual economic activity in the last few years. For much of the Biden administration, public opinion about the economy was steeply negative — even as consumers kept spending and business kept hiring.

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Strong wage growth for low-wage workers bucks the historic trend

Summary: From 2019 to 2024, low-wage workers experienced historically fast real wage growth—a tremendous 15.3%. Yet pay started at such a low point, they continue to suffer from wages that are grossly inadequate to sustain families.

https://www.epi.org/publication/strong-wage-growth-for-low-wage-workers-bucks-the-historic-trend/?

The State of Working South Carolina

Summary: A long history of policies designed to maintain racial hierarchies and stack the deck against workers means low wages and poor working conditions for many South Carolinians.

https://www.epi.org/publication/state-of-working-south-carolina/?

Domestic workers’ pay and working conditions in the South reflect racist, gendered notions of care

Rooted in Racism and Economic Exploitation: Spotlight

https://www.epi.org/publication/domestic-workers-pay-and-working-conditions-in-the-south-reflect-racist-gendered-notions-of-care-rooted-in-racism-and-economic-exploitation-spotlight/?

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Cutting Medicaid to pay for low taxes on the rich is a terrible trade for American families

Keeping taxes low for the richest households and corporations is the clearest legislative priority of the Trump administration and the Republican congressional majority. Many provisions of the 2017 tax law (often called the Tax Cuts and Jobs Act or the TCJA) are expiring this year. Extending these provisions would provide hugely disproportionate benefits to the richest households.

https://www.epi.org/publication/cutting-medicaid-for-low-taxes-on-the-rich-is-terrible-for-american-families/?

Tough job market

About 25% of US businesses have scaled back their hiring plans because of the turmoil unleashed by President Donald Trump’s trade war, according to a new survey of chief financial officers. Faced with deep uncertainty, some businesses are pulling back.

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? Charted: Where new Trump tariffs bite

Data: Wards Automotive and Barclays. Chart: Axios Visuals President Trump's 25% tariffs on imported vehicles — unveiled yesterday — will hit foreign automakers the hardest, though domestic automakers GM and Ford will also face a significant impact. Why it matters: About 45% of U.S.-sold vehicles are imported, with the largest percentage coming from Mexico and Canada, Axios' Nathan Bomey writes. Experts expect automakers to raise prices to make up for at least part of the cost. Volvo (13%), Mazda (19%) and Volkswagen (21%) make the lowest share of their U.S.-sold vehicles in this country, according to Wards Automotive and Barclays research.

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The s-word rippling through America

Economic growth has flatlined so far this year. Inflation has picked up. And consumers expect both to get worse in the months ahead, Axios chief economic correspondent Neil Irwin writes.

• Why it matters: For the moment, it adds up to Wall Street's least-favorite "s-word," stagflation — stagnant growth mixed with elevated inflation.

? That pattern, most vividly seen in the 1970s, is particularly painful because it means people experience pain from both lack of job opportunities and higher prices.

• It also leaves the Fed and other economic policymakers with less ability to cushion the blow because a move that might address one side of the problem could worsen the other.

The takeaway, from a slew of recent data, is that President Trump inherited a shakier economy than it seemed and is risking something worse with aggressive policy moves.

? State of play: The backward-looking data lately has been distinctly stagflationary. Consumer spending in the first two months of 2025 has been soft, coming in 0.6% below its December rate (when adjusted for inflation).

• A real-time estimate of GDP published by the Atlanta Fed is now pointing to economic activity shrinking by 0.5% in Q1, which ends Monday (after adjusting for gold inflows that distort economic data).
• Meanwhile, the inflation measure favored by the Fed has risen at a 4.1% annual rate in the first two months of 2025, the highest in a year.
• That all helps explain why, following a steep selloff Friday, the S&P 500 is now 9% below its Feb. 19 high.

? Reality check: The GDP number appears to be depressed by a one-time surge of imports as companies try to get ahead of tariffs. Inflation has been on a bumpy path for years.

• Key measures of the job market have held up fine.

But when it comes to what will happen next, Americans have become more downbeat on both the outlook for jobs and inflation.

• The University of Michigan's long-running consumer sentiment survey dropped for the fourth straight month in March, with the steepest declines seen in what Americans — including Republicans — expect for the future.
• Two-thirds now expect unemployment to rise over the next year, the highest share since the annus horribilis of 2009.
• At the same time, the average expectation for inflation over the next year surged to 5%, from 4.3%.

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? Fink to Wall Street: Keep calm

In his widely read letter to investors out this morning, BlackRock CEO Larry Fink reassures investors that this moment of economic anxiety will pass, Axios' Emily Peck writes.

• Why it matters: Fink runs the world's biggest asset manager and is hugely influential. His annual letter reflects top business trends.

Fink treads cautiously in the 27-page letter, never explicitly mentioning President Trump, and only touches on politics glancingly at the top:

"I hear it from nearly every client, nearly every leader — nearly every person — I talk to: They're more anxious about the economy than at any time in recent memory. I understand why. But we have lived through moments like this before. And somehow, in the long run, we figure things out."

Read the letter ... Go deeper: 5 highlights from the letter ... Ben Geman contributed reporting.

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The US economy added 228,000 jobs last month, but the unemployment rate ticked up

As of March, the US labor market remained on solid footing: Job gains were broad-based and better than expected and participation picked up.

https://www.cnn.com/2025/04/04/economy/us-jobs-report-march-2025?

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? Inflation's new bite

Illustration: Brendan Lynch/Axios

When sky-high inflation pummeled Americans in 2022, the labor market was booming and wages were rising, softening the blow. Now we're in a more vulnerable place, Axios' Emily Peck writes. Why it matters: Economists fear that if tariffs drive inflation, wages won't keep up — leading to lower incomes and real pain. ? By the numbers: Wage growth cooled to 3.8% in March from 4% the previous month. It's been declining since the fall. The labor market is in a solid place, but there are worrying signs. Hiring is well off the heights of 2022. A white-collar hiring recession is in play. And now a glut of highly educated ex-federal employees is set to hit that market. ? Reality check: We're in totally uncharted waters. The average effective tariff rate would rise to 22.5% if all announced policy changes stick — the highest since 1909, The Budget Lab at Yale found. It's possible that higher prices and unemployment (or fear of it) will push spending down and keep inflation in check. ? "Which system is gonna be hurt the most when you jab a fork into a light socket? I don't really know," says Michael Madowitz, principal economist at the Roosevelt Institute. "That's why we don't force forks into light sockets, traditionally."

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?️ Dimon warning

Jamie Dimon's annual letter.

JPMorgan Chase CEO Jamie Dimon says in his annual letter, out this morning, that the U.S. economy was already weakening before President Trump's sweeping new tariffs — and those levies will now fuel inflation and slow growth. Why it matters: Dimon, for decades one of the most powerful figures in global finance, is offering his closely watched views in the midst of a global market crisis, writes Axios' Ben Berkowitz, managing editor for business. "There are many uncertainties surrounding the new tariff policy: the potential retaliatory actions, including on services, by other countries, the effect on confidence, the impact on investments and capital flows, the effect on corporate profits and the possible effect on the U.S. dollar," Dimon writes in his 58-page letter. "The quicker this issue is resolved, the better ... ome of the negative effects increase cumulatively over time and would be hard to reverse. In the short run, I see this as one large additional straw on the camel's back." Between the lines: In his 2024 letter, Dimon laid out a pro-trade message. This year, he acknowledges the U.S. is right to protest, and try to fix, some trade abuses. But he also says the answer is negotiations, particularly those that preserve international economic alliances. Read his full letter.

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CHART OF THE DAY

 

“Trump takes America’s trade policies back to the 19th century.” (Source: The Economist)

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The ongoing influence of slavery and Jim Crow means high poverty rates and low economic mobility in the South

Summary: Efforts to continue exploiting Black workers led to racist anti-worker policies that continue to maintain high rates of poverty, low economic mobility, and high levels of inequality for workers of all racial and ethnic backgrounds in most Southern states.

https://www.epi.org/publication/rooted-racism-part4/?

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? Americans hit stores to beat tariffs

Illustration: Annelise Capossela/Axios

Americans appear to be stocking up on imported goods — TVs! Yoga pants! Wine! Cars! — that will likely see price increases with high tariffs, Axios' Emily Peck reports. ? Apple stores were "slammed" with panic buyers, and transactions are up at big box retailers like BJs, Costco and Target, according to new data from Consumer Edge. The data shows increased sales volume for "shelf stable" groceries like instant coffee (+21%), ketchup (+18%) and beer (+3%). After Trump's tariffs speech, Mark Cuban encouraged people to get out there and buy everything, warning that retailers would take advantage of the moment to jack up prices on stuff not subject to tariffs: "From toothpaste to soap, anything you can find storage space for, buy before they have to replenish inventory." Data: FactSet. Chart: Erin Davis/Axios Visuals ? Stat du jour: Trading volatility like we've seen this week has happened only four previous times since 1978, Axios' Felix Salmon reports.

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? Tariff whiplash hits economy

Table: Axios Visuals President Trump's epic tariff retreat shows there's no grand strategy for revolutionizing global trade, and that he's governing — as he always has — through gut instinct, Axios' Zachary Basu writes. Why it matters: Trump's allies see a genius at work. His critics see a madman steering the economy toward crisis. And Wall Street sees, for the first time in weeks, a president who's responsive to external pain. ?️ The big picture: Trump's stunning 90-day pause on reciprocal tariffs — announced just one week after "Liberation Day" — caught virtually the entire world by surprise. In one fell swoop, Trump shelved his maximalist tariff ambitions, intensified his trade war with China, and unleashed one of the biggest stock market rallies since World War II. "Many of you in the media clearly missed "The Art of the Deal." You clearly failed to see what President Trump is doing here," White House Press Secretary Karoline Leavitt scolded reporters. White House deputy chief of staff Stephen Miller tweeted: "You have been watching the greatest economic master strategy from an American President in history." Less than four hours before Trump's cave. Via Truth Social ? Reality check: Plenty of Trump-friendly investors, led by hedge fund titan Bill Ackman, are thrilled with this development. But there's little evidence that it was the master plan all along. Trump contradicted his own surrogates when he acknowledged yesterday that he was concerned traders were "getting a little bit yippy, a little bit afraid" — and that "you have to have flexibility." Between the lines: Whether or not Trump's plan was always to pause the tariffs for negotiations, the reality is that he was facing massive pressure on multiple fronts leading up to the decision. Five polls conducted entirely after "Liberation Day" showed a significant dip in Trump's approval rating, with a consistent majority of Americans expressing opposition to his tariff plans.

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? Charted: New recession odds

Data: Kalshi. Chart: Axios Visuals The probability of a recession in the U.S. this year — at least as measured by prediction market Kalshi — peaked at 70% on Sunday afternoon, after China announced its retaliatory tariffs, Axios Markets co-author Felix Salmon writes. Why it matters: While the odds have now eased to 54%, that's still higher than before the Liberation Day tariffs were announced. ?️ Between the lines: Many economists are still projecting economic growth this year. "We are coming from strength," explains Loomis Sayles portfolio manager Pramila Agrawal. Keep reading.

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CHART OF THE DAY

 

"The manufacturing boom that started under the Biden administration is grinding to a halt under Trump." (Source: Michael Thomas/U.S. Census Bureau)

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US consumer sentiment plummets to second-lowest level on records going back to 1952

Americans are rarely this pessimistic about the economy.

https://www.cnn.com/2025/04/11/economy/us-consumer-sentiment-april/index.html?

Wall Street execs sound warnings on economic outlook

As the U.S. heads into earnings season, Wall Street executives raised caution Friday over an economy gummed up by economic uncertainty.

https://www.axios.com/2025/04/11/wall-street-jpmorgan-dimon-outlook-earnings?

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Shrinking shadow economy

Illustration: Brendan Lynch/Axios

Pockets of the U.S. economy — from landscaping to elder care to restaurants — depend on the labor of undocumented immigrants to stay afloat. But the vast shadow workforce extends beyond them to include legal immigrants with work restrictions, such as students and asylum seekers, Axios' Erica Pandey writes. Why it matters: Immigration crackdowns by the Trump administration are spreading fear — causing people to skip work, straining businesses, and leaving families without income. Anxiety is rising among undocumented workers after the IRS agreed to share data with ICE, leaving many worried that paying taxes could now be used against them. While President Trump's deportation drive is focused on undocumented immigrants, visa holders can also potentially be deported for working illegally. Short of that, they can be barred from returning to the U.S. once they leave or are denied permanent residency. ? By the numbers: The U.S. workforce includes more than 8 million unauthorized immigrants, Pew estimates. The true number of people working while bending the rules is likely higher than that. One historic example is Elon Musk, who has acknowledged he was in a legal "gray area" when he started a company while in the U.S. on a student visa. Zoom in: Foreign students have a range of limitations on when and where they can work. But they often find jobs to cover high tuition costs. Jobs on campus — which are allowed — pay minimum wage or close to it, and there are limits on how many hours per week students can work, an Asian international graduate student at a Boston area university tells Axios. "That wouldn't even cover rent and groceries, let alone tuition." Asylum seekers, who must wait at least six months for a work permit, frequently work under the table to make ends meet. Temporary workers also often supplement their primary employment with informal gigs. ? The stakes: The industries that rely on this shadow workforce include construction, agriculture, hospitality and retail. If those sectors lose workers, "American consumers are going to see higher prices," says Patricia Campos-Medina, executive director of the Worker Institute at Cornell's School of Industrial and Labor Relations.

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Workforce worries

Fear of unemployment has jumped to its highest level since the pandemic, according to a new survey. The results from the Federal Reserve Bank of New York reflect Americans’ glum outlook under unpredictable federal policies, which have caused uncertainty and recession fears.

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Immigrants and the economy

Immigration is among the most important economic and political issues and a main topic of discourse and debate among policymakers and the public. But misperceptions persist about many fundamental aspects of this crucial topic, such as:

https://www.epi.org/publication/immigrants-and-the-economy/?

Unauthorized immigrants and the economy

Immigration is among the most important economic and political issues and a main topic of discourse and debate among policymakers and the public. But misperceptions persist about many fundamental aspects of this crucial topic, such as:

https://www.epi.org/publication/unauthorized-immigrants/?

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? Market's reddest line

Illustration: Sarah Grillo/Axios

President Trump is toeing an economic red line that few before him have dared even consider crossing, Axios' Courtenay Brown and Neil Irwin write. Why it matters: The mere possibility that Trump could erode the Federal Reserve's independence has been enough to unnerve investors and tank the stock market. Trump risks plunging the global financial system into crisis if that threat becomes a reality and he attempts to remove Fed Chair Jerome Powell or undermine his authority. "Were Powell to be fired, the initial reaction would be a huge injection of volatility into financial markets, and the most dramatic rush to the exit from U.S. assets that it is possible to imagine," Michael Brown, a market analyst at brokerage firm Pepperstone, wrote in a recent note. Trump demanded "major loser" Powell preemptively cut interest rates "NOW," in a Truth Social post yesterday. ?️ The big picture: It's easy to imagine why a president would want low interest rates and cheap money policies that help juice the economy. But no U.S. leader in the past half century has taken the risk of trying to force the Fed's hand. Keep reading. Page B11 of today's Wall Street Journal. ? Time-capsule headline: "The Dow Jones Industrial Average shed almost 1,000 points on Monday and is headed for its worst April performance since 1932," The Wall Street Journal reports (gift link). "The S&P 500's performance since Inauguration Day is now the worst for any president up to this point in data going back to 1928 [the year before the Great Depression began], according to Bespoke Investment Group."

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? Manufacturers' bad mood

Data: Axios research. Chart: Axios Visuals America's manufacturers are supposed to be one of the big beneficiaries of Trump's trade war. But they're deeply apprehensive about what the economy has in store for them. That's the unmistakable picture from a slew of recent surveys by regional Federal Reserve banks, along with the Fed's regular compilation of anecdotal information, Axios' Neil Irwin writes. ? The hot-off-the-presses Beige Book, released eight times a year and based on what business contacts around the country are saying about conditions, used the word "uncertainty" 80 times. It follows the release of surveys of manufacturers from the Fed banks in New York, Philadelphia and Richmond in the last 10 days that have all shown a steep deterioration in the outlook. "Business leaders indicated recent strategy discussions shifted away from capital investments aimed at innovation and efficiency toward a focus almost entirely on mitigating tariff-related risks," the Kansas City Fed reported.

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Domino's Pizza US sales dip as inflation, economic uncertainty hurt demand

April 28 (Reuters) - Domino's Pizza (DPZ.O), opens new tab on Monday posted a surprise decline in first-quarter same-store sales in its biggest market, as elevated inflation and economic uncertainty hit consumer appetite for restaurant food.

https://www.reuters.com/business/dominos-pizza-posts-surprise-fall-us-same-store-sales-inflation-bites-2025-04-28/?

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? Top economic fear

Data: NBC News Stay Tuned Poll. Chart: Axios Visuals NBC News surveyed nearly 20,000 adults earlier this month and asked which economic issue mattered to them most. It wasn't even close, Axios' Ben Berkowitz writes. Inflation beat any other issue by more than a two-to-one margin. No. 2 on the list was taxes, though young adults listed unemployment as their second-biggest issue. For the 65+ crowd, it was government spending and the national debt.

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Consumer confidence shows "pervasive pessimism"

Americans now expect the job market and other measures of economic well-being to deteriorate in ways not seen since some of the darkest moments in recent economic history, per data out Tuesday morning.

https://www.axios.com/2025/04/29/consumer-confidence-jobs?

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UPS to cut 20,000 jobs, close some facilities as it reduces amount of Amazon shipments it handles

UPS is looking to slash about 20,000 jobs and close more than 70 facilities as it drastically reduces the amount of Amazon shipments it handles.

https://apnews.com/article/ups-amazon-ece105621fe23b2d0de76a2247df6b8b?

US economy goes into reverse from Trump’s abrupt policy shifts

The US economy just had its worst quarter since 2022 as President Donald Trump’s significant policy changes unnerved consumers and businesses.

https://www.cnn.com/2025/04/30/economy/us-gdp-q1/index.html?