The U.S. economy, which weathered false recession alarms in 2023 and 2024, is entering another uncomfortable summer.⁠ ⁠ Job growth held steady in May, with the economy adding 139,000 jobs. The unemployment rate has stayed in a tight range, between 4% and 4.2%, over the past year.⁠ ⁠ But there are cracks beneath the surface. Policy uncertainty has unfolded against the backdrop of an economy with slower job growth and a cooling housing market. Compared with last year, the Federal Reserve is more reluctant to cut interest rates because officials are worried about new inflation risks.⁠ ⁠ Whether the economy again bends, rather than breaks, turns on how the U.S. consumer handles the latest curveball—this time from President Trump’s desire to reorder America’s trading relationships and reduce reliance on imported goods. For months, the president has announced one large tariff increase after another, at times wavering from escalation to temporary resolution.⁠ ⁠ Economists largely agree that for the U.S. economy to slide into recession, the American consumer needs to falter.⁠ ⁠ Most economists think the prospects of a recession are higher than they were at the beginning of the year but lower than in April and early May, when tariffs on China had been increased by 145%.⁠ ⁠ Three risks loom large. Read more at the link in our bio.