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3w ago

U.S. Recession Risks Surge as Q1 GDP Estimate Revised to -3.7%

Consumer confidence hits a 12-year low, inflation remains elevated, and the manufacturing sector contracts as economic challenges mount.

Austan Goolsbee, President of the Federal Reserve Bank of Chicago, speaks at the Stanford Institute for Economic Policy Research (SIEPR) Economic Summit in Palo Alto, California, U.S., February 28, 2025. REUTERS/ Ann Saphir/File Photo
US President Donald Trump is expected to announce a raft of new tariffs on April 2
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Veteran investor Jim Cramer worries that tariffs could be bad for the economy.

Overview

  • The Atlanta Fed's GDPNow model revised its Q1 2025 GDP growth estimate to -3.7% as of April 1, underscoring significant economic contraction risks.
  • Consumer confidence has plummeted, with the Conference Board’s index reaching its lowest level in 12 years, signaling deepening pessimism about future business and employment conditions.
  • Inflation remains above the Federal Reserve's 2% target, complicating the central bank's ability to respond to slowing growth with interest rate cuts.
  • The U.S. manufacturing sector shows signs of contraction, with the ISM Manufacturing Index falling to 49 in March, indicating potential economic deceleration.
  • Trade and tariff policy uncertainty continues to contribute to inflationary pressures and economic instability, further exacerbating recession risks.