The U.S. economy has got its mojo back. When President Trump introduced tariffs this spring, many predicted a sharp drop in consumer demand. Instead, households paused briefly and then started spending again. They are now booking trips, dining out, and shopping with renewed confidence.
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This resurgence shows how resilient the American shopper has become. Despite earlier threats of higher prices, consumers are pushing back and moving forward.
Mainstream Banks Cast Off Recession Warnings
Big banks like JPMorgan Chase (JPM) initially forecasted a slowdown or even a recession. Those warnings have faded as economic indicators have improved. The bank now expects continued growth, though at a moderate pace.
Bank of America (BAC), Citigroup (C), and Goldman Sachs (GS) have also reported healthier revenues. At United Airlines (UAL), travel demand rose sharply. All of this suggests that the economy is outperforming earlier fears.
Small Businesses Feel the Surge
A survey, conducted by marketing platform Constant Contact, of over 1,200 small-business owners showed that many are seeing stronger demand than projected in January. Nearly one in three entrepreneurs now plans to hire in the coming months.
These signs suggest that optimism is spreading beyond Wall Street and into Main Street. Small businesses are adding staff and expanding services to meet rising customer interest.
Cautious Growth amid Lingering Risks
Still, growth remains modest and inflation is steady but above the Federal Reserve’s ideal. Manufacturing has shrunk for four consecutive months as of June. Latino consumer spending showed signs of slowing after recent immigration raids.
Meanwhile, Trump has delayed some tariffs, but threats of new levies on EU and Mexican imports are set for August. That ongoing uncertainty could still weigh on economic momentum.
Personal Stories Reflect Renewed Optimism
In Portland, according to the Wall Street Journal, product manager Tyler Ahn went from hoarding survival gear to planning a vacation in France and Italy. She decided she had waited long enough and deserved a break.
In Boston, as reported by the WSJ, tools business owner Christian Reed paused new product lines due to fears of rising costs. But by July, he had pivoted, choosing to upgrade his family’s vehicle, believing worst-case scenarios did not materialize.
Steady Outlook Ahead Despite Taxed Headwinds
Experts caution that the impact of tariffs may unfold slowly over time. JPMorgan economist Michael Feroli notes that effects often emerge months after implementation. The trajectory will depend on inventories, pricing strategies, and policy moves.
So while consumers are back in motion and businesses are investing again, the overall growth is expected to stay slow and measured. For now, the economy has found its stride after a rocky spring.
Keeping an eye on key economic signals helps investors and consumers stay ahead of the curve. The TipRanks Economic Indicators Dashboard offers a clear snapshot of where the U.S. economy stands right now. With the federal funds rate at 4.33%, inflation holding at 2.67%, and retail sales ticking up by 0.65%, there are signs that consumer activity is firming up despite sluggish GDP growth.
Click on the image below to explore the full dashboard for a real-time view of interest rates, bond yields, inflation, and more.
