US Economic Outlook: June 2025

Economic conditions are entering a more fragile phase. In this month’s 10-minute report, Board Principal Economist Natalie Gallagher breaks down the latest data and explains how shifting inflation dynamics, slowing growth, and evolving consumer behavior are reshaping the outlook — especially for CPG.

Highlights in this month’s report include:   

• GDP growth contracted in Q1, and forecasts for the second half of the year remain subdued amid rising input costs and policy uncertainty.
• Tariff-driven inflation is poised to accelerate, placing renewed pressure on household budgets and compressing real income gains.
• CPG growth expectations have softened, but essentials demand remains resilient — supported by employment, income, and population growth.
• Consumers are already adjusting, with increased price sensitivity, stronger private label loyalty, and early signs of trade-down behavior.