How Is the Economy Doing?
The current economy is defined by strong economic growth, a softening labor market and slowing inflation.
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Updated on April 25.
Here’s what NerdWallet’s senior economist Elizabeth Renter will be watching for in economic news and data during the week of April 28:
The coming week will be a big one for economic data releases, and another where we continue to look for evidence of recent policy turbulence in the hard data. Consumers and businesses are feeling the strain of unclear messaging and changing policies. We can see this in sentiment data. Bracing for the impact of changing policies has begun to show up in hard data, too — auto sales, for example, have surged as consumers try to get in front of tariffs. But the actual impacts of changing policies — slowed imports and higher prices due to tariffs — may still be some months away from the hard data.
Upcoming data releases:
Tues., Apr. 29:
Advanced U.S. Trade Balance and Inventories, Census - This release will look back at March, so I anticipate we won’t see much change in international trade. Instead, I’ll be looking at inventories, and expect to see evidence of wholesalers and retailers stocking up ahead of tariffs.
Consumer Confidence, The Conference Board - Consumer sentiment has been falling amidst great economic uncertainty. I expect this read of April’s data from The Conference Board to show a continued waning of confidence as households struggle to prepare for the future amidst mixed messaging and changing policies.
Job Openings and Labor Turnover Survey (JOLTS), BLS - Hiring likely remained subdued in March as employers would be reluctant to invest in new talent amidst uncertainty. It’s unlikely we’ll see a significant uptick in layoffs, including federal layoffs, in this release.
Wed., Apr. 30:
PCE inflation, spending and more, BEA - Private data and anecdotal evidence is showing that consumer discretionary spending is slowing. This could show up in the BEA’s expenditure data as a decrease in categories such as food services and accommodation, gasoline and transportation services, for instance. However, an uptick in vehicle purchases by consumers trying to get ahead of tariff effects may help offset this slowing.
Fri., May 2:
Jobs report, BLS - I anticipate March’s healthy gain in jobs will be revised down with this release to something more closely resembling the previous 12-month average. Federal government employment will also continue to decline as natural attrition pairs with little-to-no hiring to create a smaller workforce, even notwithstanding deferred resignations, planned layoffs and workers placed on administrative leave.
The state of the U.S. economy is strong despite inflation remaining elevated. The economy is expanding at a crisp pace, the labor market is loosening slightly and inflation is slowing from its peak. The Federal Reserve looks at several economic indicators — along with the stock market — to form a better picture of the economy and make decisions on interest rates.
Is the U.S. in a recession?
The United States is not currently in a recession, but the impacts of new tariffs and a looming trade war have unsettled financial markets and raised fears of an economic downturn. Even President Donald Trump has said a recession is possible. For ongoing updates on recession news, see: Are we in a recession?
Is the U.S. economy growing?
Q4 2024 Real GDP: 2.4%
The U.S. economy has shown steady growth since it dropped to unprecedented levels during the second quarter of 2020 due to the pandemic — and then rebounded almost as quickly. A year later, in the second quarter of 2021, the rate of annual growth hit a high not seen since the 1950s.
» MORE:
Gross Domestic Product (GDP) is the market value — in current dollars — of all goods and services produced within the United States in a given period. The data that shows GDP adjusted for inflation is called Real GDP. All GDP changes are expressed on an annualized basis and reports are released quarterly by the Bureau of Economic Analysis.
» MORE: GDP Report
What is the U.S. unemployment rate?
March unemployment rate: 4.2%
The U.S. unemployment rate is the share of unemployed people as a percentage of the overall labor force. Unemployed people are those who are actively seeking work. The labor force doesn’t include the entire population; it’s just the number of people who are employed plus those who are unemployed but looking for jobs.
The unemployment rate had remained low since December 2021. During this period it fluctuated between 3.4% and 3.9%. But the rate began to increase this spring and has topped 4% since May.
How fast are wages growing?
February wage growth rate: 4.3%
Wage growth is moderating from what it was at this time in 2023 and is much lower than its peak in 2022. Still, the most recent data from the Federal Reserve Bank of Atlanta shows that annual growth is pacing much faster than it did in 2020.
Below is the three-month moving average of median hourly wages over the last decade.
Is inflation going down?
March CPI inflation rate: 2.4%
Inflation measures the rate of price increases, on an annual basis. The Federal Reserve is targeting a 2% inflation rate.
Consumer price index (CPI)
The current inflation rate is typically a reflection of the consumer price index (CPI), which is released monthly by the Bureau of Labor Statistics. The CPI measures changes in prices that consumers pay for goods and services including food, gas and rent. The core measure of the consumer price index excludes two volatile factors: food and energy. The core CPI, as of March, is 2.8%.
Personal consumption expenditure (PCE)
February PCE inflation rate: 2.5%
February core PCE rate: 2.8%
The Federal Reserve’s preferred measure of inflation is the core personal consumption expenditure (core PCE), which is released monthly by the Bureau of Economic Analysis. The PCE follows the goods and services consumers buy and the price they pay for them. It also tracks changes in spending habits as prices fluctuate.
» MORE: What is the PCE?
Trump intensifies trade war
President Donald Trump has recently implemented tariffs that affect virtually all U.S. trading partners. For details, see:
How much is the U.S. dollar worth now?
The dollar index measures how the dollar compares to other currencies. The U.S. dollar is usually considered a safe haven, especially during times of market volatility and economic uncertainty. But in 2025, the value of the dollar is falling as investors sell off U.S. assets, largely due to uncertainty tied to Trump’s protectionist policies and broad sweeping tariffs.
Rent vs. inflation
Rent costs are a significant factor driving inflation. That’s because rent is included within the shelter price index and shelter comprises the biggest segment of the CPI. The rent portion of the CPI has outpaced overall inflation for decades.
However, there’s a lag in how rent data is reflected in the CPI, which means rental shifts — up or down — won’t immediately be reflected in the report. The lag is due to the cycle of lease renewals. Companies that track rental prices, like the housing website Zillow, show that rent increases have slowed down for nearly a year, but that slowdown has yet to show up in the CPI report.
» MORE: Rental market trends in the U.S.
When will interest rates go down?
Federal funds rate: 4.25% to 4.50%
The federal funds rate, also known as the Fed rate, is the interest rate that U.S. banks pay each other to borrow or loan money overnight. The federal funds rate affects interest rates on consumer lending products like credit cards and mortgages.
The fed rate is set by the Federal Open Markets Committee (FOMC), which is the monetary policymaking arm of the nation’s central bank known as the Federal Reserve. At the FOMC’s eight scheduled meetings each year, it takes action on the federal funds rate. That means it will hike, hold or lower rates, depending on economic conditions.
After a year of paused interest rates, the Fed made rate cuts at its September, November and December meetings. The FOMC paused rates at its January and March meetings.
» MORE: What is the federal funds rate?
Consumer confidence in the economy
Consumer confidence — or sentiment — is an index that reflects people’s perceptions about the economy in the short-term and the outlook for the future. There are two main consumer sentiment indexes: the University of Michigan’s Index of Consumer Sentiment and The Conference Board’s Consumer Confidence Index.
The University of Michigan’s Index of Consumer Sentiment: The first reading for April registered at 50.8, compared to its March reading of 57, according to the latest survey released on April 11. The index now sits just above the historical low of 50 in June 2022.
Current Economic Conditions registered at 56.5, compared to 63.8 in March.
The Index of Consumer Expectations was at 47.2, compared to 52.6 in March.
The Conference Board’s Consumer Confidence Index: The survey’s results for January showed the index declined for March (92.9), compared to February (100.1).
More readings:
The Present Situation Index fell to 134.5 in March from 138.1 in February.
The Expectations Index declined to 65.2 in March, compared to 74.8 in February.
How’s the stock market doing?
The health of the stock market is represented by major stock market indexes like the Dow Jones Industrial Average, S&P 500 or the NASDAQ 100. These indexes include broad sections of the stock market, but aren’t entirely exhaustive. That means the performance of these indexes represents the fluctuations in the entire market. So when the stock market goes up that means stock market indexes have gained value and vice versa.
» MORE: S&P 500 Index (SPX)
Data may be delayed and is for informational purposes only.
Latest mortgage interest rates
Mortgage rates change daily according to what’s happening in the economy.
NerdWallet’s daily mortgage rates below are calculated as an average of the annual percentage rate (APR) with the lowest points from a selection of major national mortgage lenders. The APR is based on the interest rate and indicates all of the costs of getting a loan including mortgage origination fees and discount points.
» MORE: Current mortgage interest rates
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