Copyright © HT Digital Streams Limit all rights reserved. Megan Leonhardt (with input from Barrons) 5 min Read April 10, 2025, 09:39 pm ist 5 things to look at for early signs of an economic downturn summary The prospects remain cloudy despite President Donald Trump’s decision to delay huge rates on many countries for 90 days. Eating is one thing that people scale back or cut when they are worried about their finances. A delay in implementing enormous tariff increases rose shares on Wednesday, but the economic outlook remains cloudy. President Donald Trump’s announcement of a 90 -day break on individualized rates on a number of major trading partners rose the S&P 500 by 9.5% on Wednesday afternoon, which was the largest percentage of profit since 2008, according to Dow Jones Market data. Nevertheless, the fear of the recession is huge, as the new baseline tariff of 10% on almost all imports is in place. The Trump administration continues to rise rates on China, which antagonizes the US’s third largest trading partner. It is unlikely to boost a lot of confidence among businesses or consumers. The combination of lost wealth, rates and concerns about what comes next can still lead to a withdrawal in expenses and employment. “If your reciprocal rates exclude China, that does not mean that the US economy has avoided a slowdown and increase in inflation,” writes Citi economist Andrew Hollenhorst. “Trade uncertainty will continue and the import of non-China can now increase, which dampens the growth in the second quarter.” Here are several indicators to note early signs of a weakening economy. Residential employment The largest driver of consumer spending is, of course, employment. Although much of the official labor data on the government is released on a delay, note the major shifts in the number of Americans submitting for unemployment benefits. The unemployed claims are released every Thursday by the Labor Department for the previous week. The moving average of four weeks of the initial claims, which smooth a degree of volatility, fell in the week 5 April to 223,000. This is approximately in line with the stable series claims that maintained most of the year. True notice-the 60-day notice of planned dismissal that employers with more than 100 employees need-is also worth looking at. They have increased in recent months, although they are still relatively low in historical terms, according to data collected by Cleveland Fed researchers. Opposed notice provides insight into the health of the private sector. Government opportunities at the federal, state and local level are not covered. The earnings season for business prospects will kick off on Friday with results from some of the largest banks in the US. Investors should focus on which companies have their way to say about the current landscape of on-again-to-again tariff policies to say about the prospects. “The economic data will be noisy for a few months, especially with the front of rates by businesses and consumers,” writes Carol Schleif, main market strategist at BMO Private Wealth. “Better reading for what the future holds is likely to be obtained from calls for earnings, such as how businesses adapt, or prepare to adapt and what their rental and expansion plans are.” An important question that comes from Trump’s retreat Wednesday is whether it will provide enough certainty to get involved in investment and rent again, writes Santander chief economist Stephen Stanley. If so, then the ‘very-Ballyhooed’ recession is already over, although it is too soon to write off a difficult second quarter for businesses, Stanley says. Even what companies don’t say is worth noting. On Wednesday, Delta Air Lines drew its 2025 leadership over concerns about the trade war. Walmart, meanwhile, did not provide updated on his revenue growth for the first quarter and left his fiscal 2026 prospects unchanged. “We just don’t know enough to say that we’re not going to make this year, and our attitude is that we don’t give up and that we can manage these things, and if that changes, we would update you at the right time,” CEO Doug McMillon said during the investor day of the retailer. Analysts and economists also watch the credit distribution closely, which is late, although they narrowed on Wednesday. The gap between returns on investment grade debt and ultrasaphe-thesa-treasurities will have to break the 2 percentage point level to start indicating a recession, writes Benoit Anne, senior managing director of MFS Investment Management. The investment grade corporate debt distribution, as measured by the Ice Bofa US Corporate Index option-adjusted distribution, was 1.21 percentage points on Wednesday. Consumer spending Richmond Fed President Tom Barkin spent the ‘trigger’ on the US economy on the US economy on Wednesday. The sector represents almost 70% of actual gross domestic product growth, which is why it is worth looking at signs that a derogatory sentiment is actually damaging the spending. Spending started the year slowly, but saw a little setback in March. During the first two weeks of March, credit card spending according to the seasonal adjusted data from Citi detected modestly by 0.2% month. The amount of retail transactions increased by 3.1% compared to a year before for the full month, compared to 2.0% growth in February, according to the latest data of Bloomberg Intelligence. Trends in restaurant spending can provide extra insight, because if consumers become anxious about their finances, it is usually one of the first issues they cut. Restaurant spending increased by 3.5% on March 30, improved the three-week trend, according to Bloomberg data obtained from credit and debit card transactions. Anne Walsh, chief investment officer at Guggenheim Partners Investment Management, says she has an edge on the busy malls and restaurants. On a recent trip, “The mall was much more than Christmas,” Walsh says, adding that she also sees full restaurants. There may certainly be a slowdown, but for the time being there are signs that spending is stopped. “The consumer was so important in this cycle,” says Walsh. “This is the one thing I pay the most attention to.” Given the frightened response of the market to the tariff news on April 2, Comerica Bank chief economist Bill Adams expects the uncertainty over trade policy more to be a great interest in economic growth than during the first Trump administration. How much of a burden it will be is the demand for the current economic expansion. Look at the warning signs. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Economy Mint Specials
5 things to take note of early signs of an economic downturn
