When President Trump slapped tariffs on nations across the globe this spring, many economists feared higher prices and spending cuts would flatten the economy.
Consumer sentiment collapsed. The S&P 500 stock index fell by 19% between February and April. The world held its breath and waited for the bottom to drop out.
But that didn’t happen. Now businesses and consumers are regaining their swagger, and evidence is mounting that those who held back are starting to splurge again.
The stock market is reaching record highs. The University of Michigan’s consumer sentiment index, which tumbled in April to its lowest reading in almost three years, has begun climbing again. Retail sales are up more than economists had forecast, and sky-high inflation hasn’t materialized—at least not yet.
“We’ve been surprised again and again by consumers,” said Jonathan Millar, senior U.S. economist at Barclays. In April, Millar predicted that the U.S. economy would likely go into recession this year. He now expects it to keep growing, albeit at a slow pace.
Read it all.When President Trump slapped tariffs on nations across the globe, many economists feared the economy would flatten. That didn’t happen—and now businesses and consumers are regaining their swagger. https://t.co/WIBgPogfQv
— The Wall Street Journal (@WSJ) July 21, 2025