Storm in Sight: Navigating the U.S. Outlook Under Tariff-Induced Uncertainty

Northern Trust’s Global Economic Research team assesses the mixed macro signals following aggressive U.S. tariff actions, highlighting implications for growth, inflation, and monetary policy.

Key Insights:

• Q1 GDP Shrinks: A -0.3% contraction driven by tariff-related import surges and weak government spending; consumption and investment remain resilient — for now.

• Labour Market Stable: April added 177,000 jobs; jobless claims and hiring metrics show no immediate stress.

• Inflation Risks Rising: Core PCE at 2.6% YoY, with Fed research warning trade shocks may elevate inflation for two years.

Read the full report for insights on interest rates, inflation dynamics, and sector-specific vulnerabilities.