JPMorgan lowers estimate of 2025 real GDP growth to 1.6%

JPMorgan notes the firm had held off on revising its economic forecast as it waited for greater clarity on trade policy, adding that it “could end up waiting a very long time,” which it calls reason to lower the growth outlook. Heightened trade policy uncertainty should weigh on activity growth, particularly for capital spending, according to the firm, which argues that already-imposed tariffs on Chinese imports, on non-USMCA compliant Canadian and Mexican imports, and on steel and aluminum will create a bump to headline inflation and a corresponding drag on consumer purchasing power. The firm lowered its estimate of 2025 real GDP growth by 0.3% to 1.6%, correspondingly revised lower its employment growth forecast and now expects the unemployment rate to peak at 4.4%, or 0.2% higher than its previous forecast.