Economists now anticipate slower U.S. economic growth in 2025, revising their forecast to about 2.0% for the year, down from an earlier estimate of roughly 2.3%, according to a recent Bloomberg survey. The outlook is weakest in the first quarter, where growth is now expected to be near 1.2%, significantly lower than prior projections around 2.2%.
The downgrades reflect rising caution among both households and firms. Uncertainty surrounding changes in trade policy under President Trump has led consumers and businesses to scale back spending and delay investment decisions. At the same time, inflation is projected to remain above the Federal Reserve’s 2% target, finishing the year close to 2.8%, which reduces the Fed’s room to cut interest rates quickly.
Some firms are increasing imports—up about 12.9% early in 2025—as they build inventories ahead of possible tariff changes. Surveys of consumer and business sentiment have shown growing pessimism, and economists now place the probability of a recession within the next 12 months at roughly 30%, up from about 25% in the prior survey.
Overall, the combination of weaker spending, elevated inflation expectations and policy uncertainty suggests a more muted growth path for the U.S. economy in 2025. Policymakers and market participants will be watching incoming data closely for signs that demand is firming or that inflation is moving decisively back toward the Fed’s target.