Recession risk remains a live debate. Larry Fink, CEO of BlackRock, has gone so far as to declare that the U.S. is already in recession¹, while J.P. Morgan Research has raised the probability of recession in 2025 to ~60%.² That said, the data paint a nuanced picture: Q1 GDP contracted by 0.3%³, with Q2 likely to follow suit, driven by tariff-induced trade distortions and preemptive import stockpiling; yet beneath the headline, consumer spending and business investment have held up, with the drag almost entirely attributable to temporary inventory dynamics.

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Despite a headline 0.3% GDP contraction in Q1 2025, the underlying consumer data paints afar more resilient picture, pushing back against recession fears. Retail sales surged 4.1% year-over-year, with March alone up 1.4% month-over-month and 4.6% year-over-year, led by strength in auto (+8.8%) and e-commerce (+4.8%)⁴. While April sales have not yet been formally released, early estimates by CNBC/NRF Retail Monitor predict a two (2) percentage point increase in Y-o-Y sales.

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Real final sales to private domestic purchasers, a cleaner gauge of domestic demand, also rose 3.0%, even as trade and government spending dragged headline GDP lower.⁵ Coupled with households absorbing core PCE inflation at 3.5% without pulling back meaningfully on spending⁵, the evidence points to an economy with strong consumer underpinnings, suggesting this is not the beginning of a broad-based recession, but rather a temporary adjustment driven by trade distortions and policy noise.

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_{1– New York Post, “Larry Fink Says Most CEOs He Talks to Think U.S. in Recession”}

_{2– J.P. Morgan Global Research, “Recession Probability Report”}

_{3– The Guardian, April 30th, 2025“US economy shrinks in first quarter of Trump 2.0 amid sweeping tariffs”}

_{4– U.S. Census Bureau, Monthly Retail Trade Reports;}

_{5– U.S. Bureau of Economic Analysis (BEA)}