The U.S. economy entered 2025 with solid growth and a resilient labor market, but several indicators were beginning to flash warning signs as the Trump administration pursued major changes to trade and economic policy.
Real gross domestic product expanded at a 2.3% annual rate in the fourth quarter of 2024. At the same time, the Atlanta Federal Reserve’s real-time forecast briefly pointed to a 2.8% contraction, reflecting weaker post-holiday spending and a surge in imports ahead of tariffs.
Inflation remained above the Federal Reserve’s target. The Personal Consumption Expenditures price index rose 2.5% from a year earlier, while overall inflation stood at 3% and shelter costs increased 4.4%.
Selected U.S. economic indicators
Annual rates reported around the start of 2025
Bars use a common 0–5% visual scale; the red bar marks contraction. GDPNow is a forecast, while the other values are reported indicators. Source: CNN, BLS, BEA and Federal Reserve Bank of Atlanta.
Consumers were also facing pressure from housing and vehicle costs. The median new-home price reached $446,300 in January, while the average new car sold for about $48,100—roughly $10,000 more than before the pandemic.
The labor market remained historically strong, with unemployment at 4%, but hiring had slowed and job seekers were staying unemployed longer. January payrolls increased by 143,000, below expectations.
Reporting source: CNN Business. Chart compiled by 2NM News from figures cited in the report.