“Immigration was an important driver of the labor market rebalancing [after the Covid-19 pandemic]. Reduced immigration could therefore fuel renewed inflationary pressures.”

“With the economy set to cool sharply in the coming months as tariffs take their toll, price-sensitive consumers are poised to become more judicious with their spending.”

The core CPI, which excludes often-volatile food and energy costs, increased 0.1% from February to March—the least in nine months.

February saw weaker-than-expected consumer spending and higher inflation.

The latest numbers from the BEA include an upward revision for GDP and downward revision for inflation.

This is the first payrolls report that fully reflects Trump’s second term, but because it landed before most of the administration’s firings, March unemployment data will look “a lot uglier.”

“The concern with higher inflation expectations is that it can be self-fulfilling—what people and businesses expect to happen, often does.”

Economists also see a 25% chance of recession in the next 12 months—up from January and the first increase in two years, but well below the 65% chance estimated in the first half of 2023.