Last week featured a slew of releases, but the most important one as of this writing is the GDP estimates. Both the GDP and GDP deflator data have started to reverse their previous trends, raising serious concerns that the economy may be experiencing deflationary effects.

This is somewhat offset by the Personal Income and Spending reports, which showed favorable numbers, as well as the Non-farm Payroll figures, which have also increased during this period.

The impact of the latest tariffs and trade wars has already appeared in estimates and data releases across numerous markets. There is strong expectation that the Federal Reserve will need to respond with support to ensure market stability, chiefly by reducing interest rates. Additionally, Consumer Confidence reports have shown a consistent downward trend for the fifth month in a row.

Consumer Sentiment

The consumer-confidence index sank in April to the lowest level since the depths of the COVID-19 pandemic, the Conference Board said Tuesday. Confidence fell 7.9 points to 86.0 in April, the fifth straight monthly decline.

Consumer Spending

Consumer spending rose briskly in March, but not because Americans are gung-ho on the economy. Many bought new cars or other items to avoid potential price increases tied to U.S. trade wars. Personal spending rose 0.7% last month, the government said Wednesday, a few ticks above the forecast of economists polled by The Wall Street Journal.

Gross Domestic Product

The U.S. economy contracted in the first quarter of 2025 for the first time in three years, reflecting a surge in imports ahead of President Donald Trump’s tariffs and a slowdown in consumer spending. Gross domestic product, the official report card on the economy, shrank at a 0.3% annual rate from January to March, the government said Wednesday. It’s the first contraction in GDP since early 2022.

Non-Farm Payrolls 

The U.S. added a stronger-than-expected 177,000 new jobs in April, suggesting the labor market was largely unscathed last month by the Trump trade wars, for the time being. The increase in jobs exceeded the 133,000 forecast of economists polled by the Wall Street Journal. Many economists had expected to see signs of damage from the trade wars in the report.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.02% for this week, with the current rate at 5.92%
• 30-Yr FRM rates saw a decrease of -0.05% for this week, with the current rate at 6.76%

MND Rate Index

• 30-Yr FHA rates saw an increase of 0.03% for this week. Current rates at 6.28%
• 30-Yr VA rates saw an increase of 0.03% for this week. Current rates at 6.30%

Jobless Claims

Initial Claims were reported to be 241,000 compared to the expected claims of 225,000. The prior week landed at 223,000.

What’s Ahead

Historically, it has been less relevant, but the Trade Balance reports will help shed light on some previously unknown data. Next week will also be lighter due to the upcoming FOMC rate decision, although a rate change is not expected.

While many useful indicators are set to be released this week, the previous week left us only with the Leading Economic Indicators, which showed signs of the economy slowing down in the future. Consumer Sentiment reports also indicated widespread dissatisfaction across all levels of income and education, largely due to the impacts of recent tariff decisions, which have been on hold.

We should expect next week to provide a clearer picture as decisions are made in the trade war between China and the United States. The PCE Prices, Non-farm Payrolls, Chicago Manufacturing PMI, Personal Income, and GDP estimates will offer more insight into the impact of the tariffs.

Concerns about inflation remain, but given the current stance on monetary policy, the Federal Reserve is much more likely not to react to inflation immediately, keeping its focus largely on the policies being set by the current administration.

Leading Economic Indicators

Leading Economic Index (LEI) for the US declined by 0.7% in March 2025 to 100.5, after a decline of 0.2% (revised up from -0.3%) in February. The LEI also fell by 1.2% in the six-month period ending in March 2025, smaller rate of decline than its -2.3% contraction over the previous six months.

Consumer Sentiment

Consumer sentiment plunged 8% in April from the prior month, to a final reading of 52.2, the University of Michigan said in its latest survey released Friday. That was a slightly smaller decline than a preliminary reading from earlier this month, which didn’t capture people’s reaction to Trump’s 90-day tariff delay announced on April 9.

Primary Mortgage Market Survey Index

• 15-Yr FRM rates saw a decrease of -0.09% for this week, with the current rate at 5.94%
• 30-Yr FRM rates saw a decrease of -0.02% for this week, with the current rate at 6.81%

MND Rate Index

• 30-Yr FHA rates saw a decrease of -0.11% for this week. Current rates at 6.25%
• 30-Yr VA rates saw a decrease of -0.11% for this week. Current rates at 6.27%

Jobless Claims

Initial Claims were reported to be 220,000 compared to the expected claims of 220,000. The prior week landed at 216,000.

What’s Ahead

PCE Prices, Non-farm Payrolls, Chicago Manufacturing PMI, Personal Income, and GDP estimates are set to release next week. With other releases in the Global US Manufacturing PMI which historically isn’t a significant indicator but with a major shift in the dynamics of world trade, we can see major changes in those data release.