Is The Economy Back on Track?
As the Summer season is in full swing and a shaky economic start to the year, and fears surrounding foreign policy, trade, a recession and tariffs have greatly been subdued due to positive economic indicators, data and many trade agreements signed and sealed. Jobs data and inflation readings have all come in as stable and positive, over the last months leading economists to reevaluate their outlook for the economy the rest of the year to a more stable and positive environment with a potential for growth.
The Wall Street Journal recently surveyed a variety of economists, fund managers and finance analysts attaining their outlook for the remainder of the year. Along with taking into account the raw data we can paint a pretty clear picture to the direction on the economy for the remainder of 2025.
Employment and jobs numbers have remained positive overall and, in most cases, have beat expectations set earlier in the year. The improved economic outlook follows 3 consecutive months of job growth of over 150,000+ new jobs and unemployment dropping to 4.1% in June from May at 4.2%. Other indicators for the employment environment such as jobless claims have continued to beat negative estimates, painting a stable picture for American workers. Economists now expect employers to add an average of 74,000 jobs to payroll per month over the coming year, up from projections of 54,600 in April.
The longer and more stable the jobs sector of the economy, the more stable spending and consumer confidence, and that’s exactly what we are continuing to see. Combined with good inflation readings despite the tariff-fueled scare, at the start of the year, prices on goods remains stable. Core consumer prices, which exclude volatile food and energy components, were up 2.8% in May from a year earlier, that’s the lowest monthly reading in four years.
Inflation has come down and stayed stable at 2.4% vs 3.0% in January. Economists predict that rate to continue to stay stable throughout the rest of the year, with that the probability of a recession has also dropping to 33% from the 54% economists predicted at the onset of the tariff war.
With that, the FED is in line to cut rates, expecting to see a decline at close to 50 basis points by year-end. GDP predictions have also been revised to show a positive outlook and growth, back at 1% GDP for 2025.
So, what do all these stable economic readings mean for your business? Overall, it’s positive news particularly from the employment and CPI data. As the average American is able to retain a stable job and not having to spend excess on goods or services than they may be used to, they have the ability to save. More savings, more disposable income and the ability to buy more products that are not necessarily deemed essential. Great news for your business, the consumer is in buy-mode.
If your business is working to maximize profits, taking note of this data is key, as it changes month to month and is affected by a variety of factors. Understanding where the economy is headed in general, where interest rates or how economic policy will be set can enable your business to make sharp, well-times decisions investing, launching a product or growing your workforce.
Currently the environment for most businesses is ripe for growth with a positive economic outlook. Stay alert and focused, you’ll be able to use this data to your advantage
To gain personalized guidance for your business on this topic and others contact us.
- Vince Calace
Founder - Venture Business Development