National Economy Snapshot

The National Economy

U.S. Growth has Slowed Amid Rising Headwinds

• GDP contracted by 0.5% in Q1 2025, marking the first economic decline in three years.
• The decline in GDP was driven by weaker consumer spending and significantly increased imports, as businesses rushed to import goods ahead of new tariffs.
• A modest rebound is expected when the Q2 numbers are released, with some forecasts projecting 3% growth, though uncertainty remains high.

Tariffs and Trade Policy Uncertainty

• The expiration of a 90-day tariff pause on July 9 could trigger higher import taxes on goods from key partners like Canada, the EU, and India. There is, however, considerable uncertainty as to what these tariff rates will be and when they will imposed.
• Trading partners are likely to retaliate if the U.S. imposes high tariffs on their goods. This could negatively impact U.S. agricultural exports.

Inflation and Interest Rates

• Inflation, which had cooled earlier in the year, could reaccelerate due to tariffs and potential oil price spikes from geopolitical tensions.
• The Federal Reserve is holding the Federal Funds Rate steady, awaiting clearer signals before making cuts.
• The Fed’s median projection sees PCE inflation at 3.0% and unemployment at 4.5% by year-end.

Labor Market and Consumer Sentiment

• While unemployment remains low, jobless claims are rising and wage growth is slowing.
• Consumer confidence has dipped, with spending on recreation and travel notably down.
• The Conference Board’s Leading Economic Index has declined for six straight months, signaling an increased risk of recession.

Currency and Global Positioning

• The U.S. dollar has lost value relative to other currencies by over 10% in the past six months, reflecting investor concerns over fiscal policy and inflation.
• A weaker dollar may help exporters but raises import costs, adding to inflationary pressures.

Outlook: Cloudy with a Chance of Volatility

• The next 60 days are pivotal: tariff decisions, fiscal spending negotiations, consumer spending, and Fed policy could all shift the trajectory.
• Most forecasts suggest modest growth (1.4%–1.9%) for 2025 overall, with risks tilted to the downside.

Additional Industry Snapshots

Dairy

Timber and Forest Products

Cash Field Crops

Livestock

Fruit

Vegetables and Potatoes

Aquatic and Fishing

Greenhouse, Nursery and Sod