In the institute’s May 2 briefing, Research Economist Sarah Dickerson reviewed another surprisingly solid employment report, weighing it with falling consumer confidence and a raft of other indicators both positive and negative in an effort to get clarity on the future of the economy.

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Key Takeaways from the May 2025 Economic Briefing
“Strong Jobs, Weak Confidence”
With Kenan Institute Research Economist Sarah Dickerson

Each month, experts from the Kenan Institute of Private Enterprise interpret the latest employment report from the Bureau of Labor Statistics and what it means for our economy. 

April’s jobs report delivered a dose of optimism but signs of stress beneath the surface have economists watching key indicators closely.        

Jobs: A Bright Spot in a Cloudy Outlook

• US employers added more jobs than expected in April, showing continued strength in hiring across several industries.
• Wages remain above inflation. That helped fuel strong consumer spending in 2024 and may still be giving households a little breathing room.

Confidence Is Cracking

• Consumer sentiment is slipping, and for the second month in a row, expectations about the economy have dropped to early-COVID levels.
• In April, the University of Michigan survey showed households expecting a 6.5% jump in inflation over the next year, marking the sharpest reading in some time.

Tariffs and GDP Slowdown

• The average US tariff rate has surged to its highest level in over a century, contributing to rising prices and disruptions in global trade.
• The US economy contracted by 0.3% in Q1 – a concerning development, though not definitive evidence of recession.

 “I do think that the risk of a recession is higher than it was previously … but we’re still more likely to see this gradual economic slowdown rather than a full-blown recession.” – Sarah Dickerson, research economist at the Kenan Institute

What We’re Watching
A few wild cards could influence a recession outcome:

• Tariffs
• Interest rates
• Consumer behavior

And join us for our next economic briefing Friday, June 6, to see if we’re trending toward a recession or holding strong. Register HERE.

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