Claire Jones of the Financial Times reports that GDP dropped 0.3% in Q1 2025—its first contraction since 2022 and a sharp reversal from the prior quarter’s 2.4% growth. This was mainly because businesses rushed to beat President Trump’s newly announced tariffs, driving imports up  41% and pushing the goods‑trade deficit to a record $162 billion in March.

Source: Financial Times (May 2025)

That said, The Economist argues that the Q1 GDP dip is a statistical quirk: the 41% pre‑tariff import surge was already counted in consumption, investment, and a hefty +2.25 pp inventory boost, so subtracting it again distorted the headline figure. Measurement lags likely missed the last‑minute stock‑up, meaning revisions should push growth positive, unless President Trump’s new tariffs ultimately curb domestic output.

Source: The Economist (May 2025)

The Mortgage Bankers Association (MBA) Chief Economist Mike Fratantoni reacts to the Q1 GDP data:

“The biggest drag on growth was a more than 50% increase in imported goods, which subtracts from growth in the GDP calculation…Clearly, businesses were rushing to get goods into the country and were willing to store them until they were needed for production. The quandary facing the Federal Reserve is that while the trend in the data is clearly showing a slowing economy, it also renewed upward pressure on inflation. We expect that the Fed will hold rates steady at its meeting next week and will indicate that it will continue to hold at this level until it becomes clear whether a recession or inflation is the bigger risk.”

Reuters reports that U‑S consumer spending jumped 0.7 % in March (vs. 0.5% expected) even as first‑quarter GDP shrank an annualised 0.3 %, a decline driven by a record import surge ahead of President Trump’s new tariffs. The headline PCE price index was flat on the month, trimming year‑over‑year inflation to 2.3 %, while core PCE rose just 0.03 %, its smallest increase since April 2020, pushing annual core inflation down to 2.6 % (from 3.0%).

Housing demand

Dana Anderson of Redfin reports that record‑high housing costs and economic uncertainty have muted 2025’s spring home‑buying season. The median monthly payment has hit an all‑time high of $2,870, mortgage‑purchase applications are down 6 % month-over-month, Redfin’s Homebuyer Demand Index is flat, and pending sales slid 2.8 % annually in April. With buyers wary of elevated rates, tariff risks, and recession odds, new listings have climbed 6.1% , and overall inventory is up 13.7%.

Source: Redfin (May 2025)

Anushna Prakash of Zillow comments on the shrinking availability of starter homes nationwide, keeping buyers on the sidelines. 233 U.S. cities now exceed the $1 million threshold for starter homes. This is down from 239 in January and is the first pullback since the peak, signalling cooling demand as sellers outnumber buyers. Listings stay on the market longer, and price‑cut rates have hit a record high. Five years ago, only 85 cities met the seven‑figure mark; even so, half of all states now host at least one such market, led by California (113 cities), New York (32), and New Jersey (20). 

This comes amidst lowering homeownership rates, according to Na Zhao of the National Association of Home Builders (NAHB). U.S. homeownership rate fell to 65.1% in Q1 2025, the lowest since early 2020 and 4.1 points below its 2004 peak. This was driven by high mortgage rates and limited supply, which have pushed affordability to multidecade lows. Younger households were hit hardest, with the under‑35 rate dropping to 36.6%, its lowest in six years, while only those 65+ saw gains. 

Source: NAHB (May 2025)

Diana Olick of CNBC reported that mortgage demand fell 4% last week, marking the slowest pace since February, as economic uncertainty and labor market concerns continue to weigh on the housing market. This is despite 30-year fixed mortgage rates edging slightly down to 6.89%. Purchase volume was only 3% higher than a year ago, even though rates were 40 basis points higher then, highlighting buyer hesitation.

Travel

Natalie Lung of Bloomberg (subscription required) reports that Airbnb issued a weaker-than-expected Q2 outlook, citing soft U.S. travel demand and broader economic uncertainty, particularly tied to tariffs, as key headwinds. The company projects growth in nights and experiences booked to “moderate” from Q1’s 7.9%, missing Wall Street’s 8.6% target. North American bookings, which make up 30% of Airbnb’s total, saw only low-single-digit growth, while bookings from Canadian travelers to the U.S. declined, shifting instead to Mexico (up 27%).

Samantha Subin of CNBC comments on the story, reporting that Airbnb issued a weak Q2 revenue forecast of $3.02B, sending shares down over 5%. This is despite Q1 results meeting estimates with $2.27B in revenue and 143.1M nights booked. The company cited economic uncertainty and softening U.S. travel demand, particularly from Canadian visitors, as key headwinds, while growth remains strong in Latin America and other international markets.

Aishwarya Jain of Reuters reports that Airbnb warns of slowing U.S. travel demand, while Delta and Hilton are also flagging stalled demand. While global bookings rose 8% in Q1, North America lagged, and Airbnb expects slower growth ahead as guests book closer to travel dates and spending remains conservative.

Travel and Tour World reports that European airlines are seeing a slowdown in U.S.-bound travel ahead of summer 2025, as shifting U.S. policies and stricter border procedures prompt caution among European travelers. Air France-KLM saw a 2.4% drop in May–June bookings to the U.S., while demand from American travelers to Europe rose 2.1%. Lufthansa flagged similar weakness from Germany, Austria, and Switzerland, prompting it to cut its planned transatlantic capacity growth for Q4 from 6% to 3%.

Veronika Bondarenko of The Street reports that Air Canada is cutting more U.S. routes—including planned summer flights between Montréal and San Francisco—amid sharply declining Canadian travel demand. Northern border crossings dropped 12.5% in February and 18% in March, while business travel from Canada plunged 40% in early 2025. The U.S. Travel Association warns that even a 10% decline in Canadian tourism could cost 140,000 jobs and $2.1 billion, with actual losses already surpassing that threshold.

Finally, Doyinsola Oladipo and Mrinalika Roy of Reuters report that growing political tension and economic uncertainty are driving a wave of Canadian “snowbirds” to sell their U.S. properties and head home for good. Canadian return travel fell sharply in March—flights down 13.5%, car trips down 32%—while realtors in Florida and Arizona report a surge in Canadian-owned listings.