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Economy growing despite tariffs, yet consumers worried about recession

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May 7, 2025

Tariffs imposed by President Donald Trump are driving increased worries about the economy, according to the National Retail Federation.

"The possibility of a U.S. recession in the near future has increased due to rising trade tensions and other economic factors, but it hasn't happened yet," NRF Chief Economist Jack Kleinhenz said in a press release.

The pronouncements of tariffs that began in January and continue make it difficult to predict the impact on economics.

"With so much uncertainty surrounding the economy in the past few months, I'm not sure anyone can predict the storm path of tariffs and their likely impact," Kleinhenz said in the release. "The wide range of uncertainty has introduced a high level of unpredictability and has raised the probability of a significantly slower pace for the U.S. economy. Hiring, unemployment, spending and inflation data continue in the right direction, but at a slower pace. Everyone is worried, and a lot of people have recession on their minds."

Kleinhenz's comments were published in the May edition of NRF's Monthly Economic Review, which said the economy is "at a pivot point" after ending 2024 with 2.8% year-over-year gross domestic product growth and falling inflation.

Nearly four in 10 consumers will go wherever the deal is best if retail prices jump due to tariffs and Baby Boomers will be leading the charge, according to a Wunderkind survey, "U.S. Tariffs: Consumer Impact Report, April 2025," regarding the impact on tariffs and consumer behavior.

For an in-depth assessment of tariffs in retail and what retailers should be doing click here.