The U.S. economy faced significant headwinds in mid-February 2025, with multiple indicators signaling growing instability. Equity markets tumbled, business confidence waned, and the housing sector struggled—all against the backdrop of new tariffs and uncertain federal policies. Below is a breakdown of the key economic developments shaping the current landscape.
Investor sentiment eroded as weaker-than-expected economic reports emerged, coupled with concerns over federal government policies. Businesses expressed apprehension over spending cuts, tariffs, and broader geopolitical risks. The latest S&P Global Market Intelligence report highlighted stalled business activity, with service-sector optimism taking a sharp downturn.
With China responsible for 40% of U.S. rare earth imports, the supply chain for essential industrial components is now under stress. Meanwhile, China accounts for 30% of all U.S. ocean imports, meaning the tariff battle could have widespread implications for global trade.
Stay Ahead of the Curve with FTR’s Rail & Trucking Podcasts!
Looking for expert insights on freight markets? Whether you're navigating the complexities of rail or staying on top of trucking trends, FTR’s industry-leading podcasts bring you data-driven analysis, market forecasts, and insider perspectives from top analysts and industry professionals. Get the latest updates on capacity, rates, regulations, and economic shifts—all designed to help you make smarter, more strategic decisions in your business.
Given Walmart's role in selling essential goods, this decline could foreshadow a broader slowdown in consumer spending—particularly among working-class households.
With mortgage rates hovering near 7%, affordability remains a critical challenge. Builders fear that tariffs could drive up construction costs, particularly for lumber and other key materials. This situation is reminiscent of past periods when plywood prices exceeded $100 per sheet, creating severe financial strain on the industry.
Meanwhile, the multi-family sector has shown some resilience, though high interest rates and immigration policy changes pose headwinds. Existing home sales fell 4.9%, while the median home price climbed 4.8% to $396,900—marking the 19th consecutive month of price gains.
The economic data from February 2025 underscores a fragile landscape. Trade tensions, inflationary pressures, and policy uncertainty are weighing on business and consumer sentiment. If these trends persist, the rest of 2025 could see slower growth, weaker consumer spending, and heightened financial market volatility.
The next few months will be critical in determining whether the economy can regain stability—or if it continues down a more uncertain path.