With President Donald Trump imposing the largest tariffs on U.S. imports in a century - raising the prospect of sharply higher consumer prices and hammering the stock market - it may feel like the nation is already mired in recession.
Except on days when Trump metes out glimmers of hope. He has announced a 90-day pause on most of his reciprocal tariffs, exempted many Canadian and Mexican shipments from 25% duties and hinted that administration officials are making progress in tariff talks with China (a claim China has denied).
The whipsawing developments beg a pivotal question during a tumultuous time: Is the country headed for a recession in 2025 or not?
Forecasters are roughly split, with nearly 4 in 10 figuring more than 50% odds of a downturn, according to a recent survey by the National Association of Business Economics.
Yet when the economy's course can shift on a presidential whim, experts are finding measures they've traditionally used to make such predictions - such as retail sales and job growth - may no longer be reliable.
In response, some economists are turning to more recent, real-time gauges of consumer and business behavior, preferring to rely on what Americans do rather than what they say to chart the economy's trajectory. The numbers paint a generally positive outlook that, according to these forecasters, should allow the nation to narrowly dodge a slump.
Others say such data is less meaningful because it will take a few months for tariffs to filter through to consumer prices. They believe that what Americans say and how they feel about what's coming is a more accurate barometer of the turmoil that lies ahead.
Last month, employers added a robust 228,000 jobs and retail sales rose a hefty 1.4%, more than expected - two readings that typically would reflect an economy in little danger of running aground.
But tariff developments are moving so swiftly that such indicators effectively amount to old news. In March, Trump boosted the tariff on China to 20% and slapped a 25% duty on steel and aluminum shipments.
In April, he unveiled a minimum 10% fee on all imports and double-digit charges on dozens of countries before announcing a 90-day pause on the higher levies for nations other than China. Yet a hike in China's tariff to 145% more than offsets the economic benefits of the pause. A 25% tariff on imported vehicles also took effect in April.
Another wrinkle: Economists acknowledge the glowing retail sales figure was likely inflated by consumers "frontloading" purchases - buying cars and other goods before tariffs take effect, a strategy that should lead to weaker sales in coming months.
"A lot of the data looks great in the rear-view mirror," said Ryan Sweet, chief U.S. economist of Oxford Economics. But, he added, "Things are changing so much."
Confronted with stale economic reports, forecasters typically turn to consumer and business sentiment data for more timely signals on how people will behave. In recent months, confidence measures for both households and companies have tumbled along with the stock market.
But over the past couple of years, such measures have served as less dependable signals of what people actually do. During stretches in 2022 and 2023, consumer and business confidence slid as the Federal Reserve hiked interest rates to fight inflation. But both shoppers and firms continued to splurge.
"The sentiment data, at least for now, has lost all its meaning," said Joseph LaVorgna, chief economist of Nikko Securities America, who held the same title at the National Economic Council in Trump's first term.
Sweet and LaVorgna believe a similar dynamic could play out.
"The consumer is still in pretty good shape," Sweet said, noting household debt has risen but remains historically low as a share of income. Meanwhile, wage growth is still outpacing inflation, and job gains have been sturdy.
Those positives should provide a "buffer" that softens the toll tariffs take on consumption, Sweet said, helping the U.S. narrowly avoid a tailspin.
At the same time, "There could be deals" between the U.S. and other countries, including China, that mitigate the impact of the tariffs on consumer prices and spending, LaVorgna said.
Here's a look at four figures that some forecasters say point to an economy that will likely sidestep recession:
First-time applications for unemployment insurance - a gauge of layoffs - rose by 6,000 the week ending April 19 but remained historically low at 222,000. In other words, employers burned by labor shortages during the pandemic are still reluctant to lay off workers despite the uncertainty spawned by the import fees.
If layoffs start spreading, "That's when consumers will run for the bunkers," Sweet said.
Job ads on Indeed, the leading employment board, have been roughly flat since just before the election. They barely budged in the first half of April - after Trump rolled out the reciprocal tariffs ‒ notes economist Samuel Tombs of Pantheon Macroeconomics.
While hires have fallen below pre-pandemic levels after hitting record highs during the health crisis, companies are still advertising vacancies despite tariff jitters.
Retail sales at stores open at least a year were up 7.4% on April 22 versus a comparable day a year earlier and have been posting 6% to 7% increases the past couple of months, according to Redbook Research.
The data is more current than the government's monthly retail sales report, but still could be flattered by Americans buying clothing, toys, or other items before tariffs kick in.
Throughout April, the number of seated restaurant diners has climbed sharply compared to a year ago, including big double-digit increases the week ending April 22, according to OpenTable, an online reservation service."Traditionally, restaurant spending... is completely discretionary," Sweet said. In other words, while consumers claim to be nervous about tariffs and the economy, they're still spending on nonessentials such as restaurant meals, movies and Broadway shows, Sweet said.
In mid-April, gasoline demand hit a five-month high, LaVorgna noted. "People are out and about, they're spending money," he said.
More skeptical economists say the optimists are looking at the wrong figures.
Households and businesses may still be spending and hiring now, but they won't when tariffs hit consumer pocketbooks around midyear, said Jonathan Millar, senior U.S. economist at Barclays.
Millar is dubious that deals to reduce tariffs can be reached quickly, especially with China.
"If we get tariffs, you're going to get pretty negative effects," said Millar, who's forecasting a mild recession by the second half of the year. "It eats into (consumers') purchasing power."
Here's the data these more-concerned economists say hints at trouble ahead:
Sure, consumer surveys have sent false warnings the past few years. But they've never been quite this dismal, Millar said. In March, Americans' short-term outlook fell to the lowest level in 12 years and well below the mark that usually foreshadows recession, according to the Conference Board's consumer confidence survey.
And in April, the share of Americans expecting unemployment to rise over the next year was the highest since 2009, according to the University of Michigan's consumer sentiment survey. Such readings generally haven't been seen outside recessions, Millar said. Americans' overall view of the economy and their finances fell to the lowest level since the worst of the pandemic-induced inflation run-up in mid-2022, the University of Michigan said Friday.
Business surveys tell a similar story.
The Federal Reserve Bank of Philadelphia's manufacturing activity survey plunged to the lowest level since April 2023. And the bank's service-sector poll revealed expected declines in activity over the next six months.
Previous business surveys the past few years showed expectations for "unchanged" activity but not outright declines, Goldman Sachs wrote in a research note.
And when such drops in business expectations have preceded "event-driven" economic slowdowns - such as the 1990 oil spike and 2001 dotcom crash - they've typically provided timely warnings, Goldman said. That's likely the case now with Trump's sweeping tariffs