May 15, 2025

Macroeconomic Indicators

Growth Unemployment and Inflation

U.S. Economic Outlook: Solid Growth, Cooling Inflation, and Rising Uncertainty from Tariff Hikes

Recent growth data show that the U.S. economy continues to maintain robust expansion. The growth rate for the fourth quarter of 2024 was recorded at 2.9%, compared to 1.4% during the same period last year. A closer look at the data reveals that consumption expenditures are driving this growth. If this pace continues, growth in the first quarter of 2025 is expected to be very close to last year’s level—around 2.5%, according to forecasts. However, the latest tariff decision is expected to have a significant negative impact on growth in the second quarter.

In parallel with economic growth, unemployment rates decreased last month. According to March 2025 data, the national unemployment rate stood at 4.2%. While this is slightly higher than the same period last year, it is lower than the previous month, yet still above the average level observed over the past two years.

We are nearing the end of the downtrend in inflation. Annual inflation in February stood at 2.8%, which is 33 basis points lower than the same period last year. This trend is encouraging for the Fed to continue its rate-cutting program. The widening gap between rent inflation and headline inflation highlights price pressures in the real estate market. In February, this gap was nearly 1.3%—the lowest recorded in the past two years.

Following the imposition of new large tariffs, uncertainty in the economy is expected to increase. High inflation and slower growth are the most likely outcomes. It is not easy to forecast the Fed’s interest rate policy, which has a significant effect on the real estate market and mortgage rates.

Description: Growth reflects the expansion of an economy's output, while the unemployment rate measures the percentage of people actively seeking but unable to find work, and inflation tracks the rise in prices, impacting purchasing power. Together, these indicators provide a snapshot of economic health and stability.