Lots of noise to contend with

Trend watch

Summer travel is ramping higher. Hotel occupancy edged up to 67.5%, which is the highest level since late October 2024. Weekly air passenger counts ebbed 3.0% to 18.1 million. It’s fairly typical for air passenger counts to be flat-to-down in early June. Thereafter, U.S. air traffic should continue to steadily climb through roughly the week of Independence Day.

We’re keeping a keen eye on freight volumes. Accordingly, we’ve updated the April shipping container volumes  and the scheduled ship bookings from China to the U.S. Meanwhile, the lull in freight imports during April has spelled rail volumes, which declined for four consecutive weeks through May 23.

Our take

U.S. economic data continues to jostle about due to tariffs – or as we’re referring to it, “hurry up and wait.” A large swathe of the March and April data appeared to accelerate as consumers and business attempted to front run tariffs; this is the “hurry up” part. Indeed, consumers rushed to buy goods that they believe will be negatively impacted by tariffs – everything from cars to iPhones. (In mid-April, tariffs were temporarily paused on certain electronics, including smartphones, laptops, and televisions.)

Furthermore, business inventories for the first quarter – on slide 9 reported within gross domestic product (GDP) and on slide 10 within the monthly import/export data – increased dramatically. That, too, is the result of tariff front running. However, you’ll also notice on slide 10 that imports plunged nearly 20% in April.

Similarly, as mentioned in the Trend watch section, shipping container volumes from China bound for the United States collapsed for four weeks in April. This is the “wait” part as some businesses and consumers seem to be rewarded for delaying purchases, especially in environment of on-again, off-again tariffs.

This is causing the air pocket we’ve warned about here in recent weeks. To wit, early signs point to a moderation in consumer spending in May after a big pull forward in March and April. Most prominently, new auto sales cooled in May from the frenzied pace in the prior two months, according to preliminary data from Cox Automotive.

Alas, there will likely be much more of this mixed economic data in the coming weeks and months as this “hurry up and wait” dynamic ripples through different industries and the economy as a whole. Moreover, the various tariff-related cases and judges’ rulings ping pong through federal courts is ratcheting up the confusion and uncertainty for market participants and decisionmakers alike. 

Bottom line

The U.S. economy has remained remarkably resilient amidst an unprecedented stretch of uncertainty with respect to tariffs. That led to an odd “hurry up and wait” dynamic, whereby some consumers and business accelerate purchases attempting to front run tariffs, while others are delaying action to wait until there’s more clarity or a pause in tariffs. It has also contributed to the recent bouts of volatility in financial markets, which we expect will continue for the foreseeable future.