MICHEL MARTIN, HOST:
The economy during the Trump administration's first 100 days has been rocky.
LEILA FADEL, HOST:
Economic output shrank during the first three months of the year, and we asked Americans how it feels to hear that news. Jeremy Rice of Lexington, Kentucky, co-owns a home decor shop called House and remembers other slumps.
JEREMY RICE: So first, we had the housing crisis. Then we had COVID. We look at this as, like, the next battle.
FADEL: His shop sells faux flowers, mainly shipped from China. The business is not recession-proof.
RICE: How much are people really going to be able to spend when your industry or what you offer isn't something that's life-dependent, right? Like, you don't have to have something pretty to live.
FADEL: Cindy Ayers Elliott is CEO of Foot Print Farms in Jackson, Mississippi. She's lost grants from the U.S. Department of Agriculture, and her costs have gone up.
CINDY AYERS ELLIOTT: It's not just automotive parts. It's also food and fertilizer and gas that you use to fuel your equipment. If it costs me more to produce, it's going to cost my neighbor or my client more to buy.
FADEL: Maureen Hatfield is a retired letter carrier in Haines City, Florida. She's concerned about housing and rising prices.
MAUREEN HATFIELD: I manage on a limited budget, but it's tighter and tighter at the store. Like, we all joke about the price of eggs, but it really is ridiculous.
FADEL: So what's in store for the next hundred days and beyond?
MARTIN: NPR's Scott Horsley is with us now to talk about the economic outlook. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning.
MARTIN: So yesterday, we learned that the U.S. economy contracted during the first quarter of the year. Is the second quarter looking any better?
HORSLEY: Not so far. The first quarter was all about people bracing for the president's trade war. April, which marks the start of the second quarter, is when those tariffs really started to bite. And that has rattled financial markets. It's also made consumers nervous that prices are going to go up. Chief Economist Greg Daco of EY-Parthenon says people are being more careful about their spending, especially when it comes to things like eating out.
GREG DACO: We did see a bit of a step back in spending on restaurants and bars, and with income trends starting to cool quite significantly, that is an additional headwind for many families across the country in terms of their ability to spend on discretionary items.
HORSLEY: As we know, consumer spending is the lifeblood of this economy. So when families start to cut back like that, it can really put the brakes on economic growth.
MARTIN: You know, in order to spend money, people usually have to make money. So how's the job market holding up?
HORSLEY: So far, the job market's been very resilient. Unemployment in March was just 4.2%. We're going to get the April jobs numbers tomorrow. Forecasters expect to see some slowdown in hiring. In general, workers say they're feeling a little less confident about job security. Seth Lilavivat is in that camp. He's still working for a biotech company in San Diego, but his employer has already had two rounds of job cuts this year.
SETH LILAVIVAT: I'm anxious about the prospect of being laid off from work. This is just the beginning. I'm like, there's going to be more.
HORSLEY: Lilavivat's also a little worried about the drop in his retirement savings. You know, the S&P 500 index is down about 7% since Inauguration Day. So Lilavivat's being more conservative about his own spending. That means no more stopping for coffee and pastries after swim practice every week. And he has put off a little home improvement project that he had been planning for this year.
LILAVIVAT: I just feel like the best thing to do is to save and then just try to stay calm. You know, we're all sort of in the same boat.
HORSLEY: Right now, that boat is getting tossed around a little bit by the economic headwinds. So it's no wonder, Michel, some people are feeling a little seasick.
MARTIN: Yeah, how about that? You know, a lot of people say they're worried about a recession. Is that where we're headed?
HORSLEY: Not necessarily, although the risk of a recession has certainly increased since the president launched his trade war. We've already seen a substantial slowdown in cargo traffic, especially from China where those crippling tariffs are in effect. Gene Seroka, who runs the ordinarily busy Port of Los Angeles, says that's going to hit the paychecks of a lot of transportation and warehouse workers.
GENE SEROKA: We're not going to put longshoremen and women out of work, but they'll probably get less hours because fewer containers are coming in. The truck drivers may not haul as many boxes every day as they do right now. Global trade will slow. Prices will increase. And it will impact jobs across America and the world.
HORSLEY: Now, Greg Daco says whether we actually fall into recession could depend on whether Trump's tariffs remain in place or get watered down. Even if the tariffs are rolled back, Daco warns, we're likely to be looking at fairly sluggish growth for the rest of this year.
MARTIN: That is NPR's Scott Horsley. Scott, thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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