Tariffs May Trigger Recession – Here's What the Data Shows
Published: 2025-05-04
Status:
Available
|
Analyzed
Published: 2025-05-04
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The US economy is predicted to enter a recession by the summer, based on the flow of goods.
"Torston expects the US economy to enter a recession by the summer."
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The US economy is predicted to enter a recession by the summer.
"Torston expects the US economy to enter a recession by the summer"
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Expect empty shelves by the end of May, likely due to a drop in consumption causing retailers to reduce stocking.
"by the end of May there will be quote empty shelves"
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Empty shelves are expected by the end of May, likely due to a drop in consumption.
"by the end of May there will be quote empty shelves"
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US port activity is predicted to stop from early to mid-May.
"activity at US ports will grind to a halt by early to midmay"
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Activity at US ports is predicted to halt in early to mid-May.
"activity at US ports will grind to a halt by early to midmay"
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If tariffs on China are less severe than previously presented, adverse market effects are expected to reverse quickly.
"if the tariffs on China are not as severe as the ones Trump proudly presented after Liberation Day then he believes many of the adverse market effects we've seen would be quickly reversed"
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If tariffs on China are less severe, adverse market effects are expected to reverse quickly.
"if the tariffs on China are not as severe as the ones Trump proudly presented after Liberation Day then he believes many of the adverse market effects we've seen would be quickly reversed"
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Goods deflation is possible in the short term due to increased inventories and decreased consumption.
"this means we could actually see goods deflation in the short term"
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If tariffs on China are less severe, the US economy, described as dynamic and exceptional, is expected to see a quick reversal of adverse market effects.
"if the tariffs on China are not as severe as the ones Trump proudly presented after Liberation Day then he believes many of the adverse market effects we've seen would be quickly reversed because the US continues to be quote the most dynamic and exceptional economy in the world"
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Goods inflation collapsed previously due to retailer stockpiling in response to pandemic demand.
"goods inflation collapsed because retailers stockpiled lots of goods in response to the pandemic demand"
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New orders for goods are collapsing across all indicators.
"new orders are clearly collapsing and this is true regardless of the indicator you use"
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Corporations are reducing their spending.
"corporates are pulling back on their spending"
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Increased supply and decreased demand could lead to a drop in goods inflation in the short term.
"the effect of this increase in supply and decrease in demand could be a drop in goods inflation in the short term"
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Services inflation may also decline due to reduced consumption and immigration crackdowns.
"services inflation could also fall because of the reduction in consumption as well as the crackdown on illegal immigration"
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Goods deflation is possible in the short term.
"we could actually see goods deflation in the short term"
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A sharp decline in inflation is expected in the coming months, influenced by various factors.
"you have a recipe for a sharp decline in inflation in the coming months"
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Increased supply and decreased demand could lead to a drop in goods inflation in the short term.
"the effect of this increase in supply and decrease in demand could be a drop in goods inflation in the short term"
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A sharp decline in inflation will be accompanied by a sharp decline in economic growth.
"the caveat though is that this will be accompanied by a sharp decline in economic growth"
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Services inflation may decrease due to reduced consumption and immigration crackdowns.
"services inflation could also fall because of the reduction in consumption as well as the crackdown on illegal immigration"
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Heavy truck sales are collapsing, indicating a potential slowdown in goods movement.
"heavy truck sales which are collapsing"
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Container freight rates are collapsing, similar to trends seen during the pandemic.
"the collapse in container freight rates"
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A sharp decline in inflation is expected in the coming months, potentially driven by falling oil prices.
"you have a recipe for a sharp decline in inflation in the coming months"
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Heavy truck sales are collapsing, indicating a potential slowdown in goods movement.
"the advent of heavy truck sales which are collapsing"
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Consumers are not faring well and are reducing their spending.
"consumers are not doing fine and they have been cutting back on spending"
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The logistics managers index has not recovered post-pandemic, suggesting ongoing economic weakness.
"the logistics managers index which keeps track of logistics activity across the US in this case the concerning thing is that the index never really recovered after the pandemic"
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Walmart plans to maintain consumer costs to gain market share.
"Walmart recently said it would do keep costs for consumers where they are to gain market share"
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Container freight rates are collapsing, mirroring trends seen during the pandemic but for different reasons.
"the collapse in container freight rates"
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Consumer confidence has reached record low levels.
"consumer confidence is at record low levels"
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Consumer sentiment is at record lows, surpassing levels seen after the 2008 financial crisis.
"consumer sentiment is literally at record lows even lower than the levels seen after the 2008 financial crisis"
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Consumers are struggling and reducing their spending.
"consumers are not doing fine and they have been cutting back on spending"
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Concerns about job losses are increasing among the population.
"more and more people are concerned about losing their jobs"
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Consumer confidence has reached record low levels, even lower than after the 2008 financial crisis.
"consumer confidence is at record low levels"
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Layoffs from Doge will not immediately impact unemployment figures due to continued payments until September 30th.
"those laid off by Doge will reportedly continue being paid until September 30th so they won't show up in the unemployment figures anytime soon"
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Consumers have been buying heavily in anticipation of tariffs, which could contribute to short-term deflation.
"consumers have also been on a buying spree ahead of the tariffs"
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International travel to the US has declined significantly, with some countries seeing a 30% drop and air arrivals also falling by up to 30%.
"the sharp drop in travel from the rest of the world to the US it's quite remarkable really travel to the US has declined by as much as 30% from some countries and the number of tourists arriving by the air has likewise fallen by as much as 30%"
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Rising trends in minimum credit card payments and delinquency rates foreshadow increased consumer stress in the coming months.
"both are clearly on a strong uptrend and this foreshadows more stress among consumers in the coming months"
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Consumer sentiment has been declining since the pandemic and has not recovered.
"consumer sentiment has been on the decline since the pandemic and never recovered"
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The US stock market, particularly S&P 500 revenue, is highly reliant on China, significantly more so than US exports to China.
"just how reliant the US stock market is on China with exponentially more revenue from the S&P 500 coming from China compared to US exports to China"
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Concerns about job losses are increasing among the population.
"more and more people are concerned about losing their jobs"
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Companies are attempting to avoid laying off employees, potentially due to concerns about rehiring in light of immigration restrictions.
"companies try their best not to fire people"
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A 90% chance of recession starting by summer is predicted if tariffs on China remain at current levels; a reduction in tariffs could alleviate negative impacts.
"if the tariffs on China are reduced then most of the bad stuff is likely to go away however he warned that if they stay at their current levels then there is a 90% chance of recession starting by the summer"
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The worst-case inflation scenario projects a 1% rise in the PCE index over the next year, with current levels around 2%.
"the worst case scenario on the inflation side would be a personal consumption expenditures index or PCE to rise by 1% over the next year and it's currently around 2%"
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280,000 layoffs by Doge are expected to cause a spike in unemployment.
"280,000 people had been laid off by Doge in theory uh this means unemployment is about to spike"
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Q1 GDP data suggests the predicted recession is likely to occur.
"the Q1 GDP data that recently came out suggests we will get the recession tors foreshadows in the report"
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Doge employees laid off will continue to be paid until September 30th, meaning they won't immediately impact unemployment figures.
"those laid off by Doge will reportedly continue being paid until September 30th so they won't show up in the unemployment figures anytime soon"
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Further economic weakening due to tariff concerns could be the trigger for a US recession.
"any further weakening due to tariff concerns could in fact be the thing that tips the US economy into a recession"
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There has been a significant decrease in international travel to the US.
"the sharp drop in travel from the rest of the world to the US"
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Unemployment figures are expected to be artificially low in the coming months due to gig work and Doge severance payments.
"unemployment is likely to be kept artificially low in the coming months due to gig work and Doge severance payments"
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Travel to the US has dropped by up to 30% from some countries, and air arrivals have also fallen by the same amount.
"travel to the US has declined by as much as 30% from some countries and the number of tourists arriving by the air has likewise fallen by as much as 30%"
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Prices of most goods may decrease as retailers absorb tariff costs to maintain or gain market share.
"the prices of most goods could actually fall as retailers swallow any tariff related costs to try and gain market share or to keep market share"
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While credit card minimum payment percentages and delinquency rates are currently low, they are on a strong upward trend, indicating future consumer stress.
"both numbers are still objectively low 11% and 1% respectively on the other hand however both are clearly on a strong uptrend"
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Travel is expected to become significantly cheaper.
"traveling is going to get a lot cheaper too"
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Gambling behavior is expected to remain strong and may even increase during difficult economic times.
"gambling behavior tends to remain robust regardless of economic conditions and there's actually data that suggests gambling will increase during hard times as people effectively gamble to try and get ahead"
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A continued decline in oil prices, due to OPEC's production increase, will make the inflation outlook less severe than anticipated.
"sprinkle in continued decline in oil prices due to OPEC's upcoming production increase and all of a sudden the inflation picture doesn't look nearly as bad as expected"
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Cash purchases of homes have decreased, likely due to investors pulling back amid market volatility.
"there's been a decline in the number of cash purchases of homes"
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Escalation of trade threats into a full-blown trade war could lead to supply chain issues and empty shelves.
"we could in fact see supply chain issues and empty shells if the trade threats escalate into a fullblown trade war"
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A trade war is characterized as a stagflation shock.
"A trade war is a stagflation shock."
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The trade situation is expected to deescalate in the coming weeks and months.
"the situation will continue to deescalate in the coming weeks and months"
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If tariffs on China are reduced, many negative economic effects are expected to disappear.
"if the tariffs on China are reduced then most of the bad stuff is likely to go away"
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There is a 90% chance of a recession starting by summer if current tariff levels on China persist, rather than stagflation.
"if they stay at their current levels then there is a 90% chance of recession starting by the summer not stagflation recession"
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The worst-case scenario for inflation involves the PCE index rising by 1% over the next year.
"the worst case scenario on the inflation side would be a personal consumption expenditures index or PCE to rise by 1% over the next year"
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If the economy weakens and consumption falls, retailers will absorb tariff-related costs.
"if the economy is weakening and consumption is falling and retailers will have to eat the costs as additional expenses"
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Q1 GDP data suggests the predicted recession is likely to occur.
"the Q1 GDP data that recently came out suggests we will get the recession tors foreshadows in the report"
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Further economic weakening due to tariff concerns could push the US economy into a recession.
"any further weakening due to tariff concerns could in fact be the thing that tips the US economy into a recession"
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Unemployment figures are expected to be artificially low in the coming months due to gig work and Doge severance packages.
"unemployment is likely to be kept artificially low in the coming months due to gig work and Doge severance payments"
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Markets and the economy are likely to experience choppy trading and slow growth until tariffs are finalized, with underlying weakness persisting afterward.
"both could continue to chop and grind until tariffs are finalized and both could see short-term periods of growth once that happens but the underlying weakness will likely remain"
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The prices of most goods may decrease as retailers absorb tariff costs to maintain or gain market share.
"the prices of most goods could actually fall as retailers swallow any tariff related costs to try and gain market share or to keep market share like Walmart"
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Travel is expected to become significantly cheaper.
"traveling is going to get a lot cheaper too"
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Declining oil prices due to OPEC's production increase could significantly improve the inflation outlook.
"sprinkle in continued decline in oil prices due to OPEC's upcoming production increase and all of a sudden the inflation picture doesn't look nearly as bad as expected"
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Supply chain issues and empty shelves could occur if trade threats escalate into a full-blown trade war.
"we could in fact see supply chain issues and empty shells if the trade threats escalate into a fullblown trade war"
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The trade situation is expected to continue de-escalating in the coming weeks and months.
"the situation will continue to deescalate in the coming weeks and months"
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