We’ve just released Forrester’s new report, US Economic Trends And Outlook, Q2 2025. This quarterly report reviews how the US economy is evolving across numerous indicators and sectors. Organizational leaders can use this analysis to chart and adjust their course over the coming months to adapt to market changes, run effectively, and successfully serve their customers.
What US organizations must prepare for:
In Q1 2025, we saw that evolving trade tariffs and policy uncertainty led to subdued economic growth indicators. US real GDP declined by 0.3% quarter over quarter SAAR (seasonally adjusted at annual rates) in Q1 2025, per the advanced estimate from the US Bureau of Economic Analysis on April 30, 2025.
To navigate the rest of 2025, business leaders must now prepare for:
Slower economic growth. The US Federal Reserve predicts that real GDP growth in the US will slow to 1.8% over the next three years, significantly lower than the 2.5% growth in 2019 and the 2.9% average growth in 2023 and 2024. Consumer spending growth follows a similar pattern. As a result, tech spending growth from businesses and government and from consumers will slow; changes to real GDP is a strong predictor for spending in both arenas.
A slowdown in government spending. Bloomberg data suggests that by 2027, government spending will see growth under the 2% mark — compared to the 3.4% growth seen in 2024. By the end of 2024, federal debt equaled 98% of US GDP, and by 2029, that’s forecasted to reach an all-time high of 107% of GDP, which will likely constrain future government spending.
Sticky inflation and higher unemployment. US headline inflation was 2.7% in Q1 2025, unchanged from Q4 2024. Per the US Bureau of Labor Statistics’ Consumer Price Index data analyzed by Forrester, the prices of durable and nondurable goods increased during Q1 2025 while services inflation continues to come down. The Federal Reserve estimates that it will take until 2027 for core inflation to reach its 2% target. Furthermore, the Federal Reserve predicts that US national unemployment will climb to 4.4%, up from 4.0% in 2024, while Bloomberg consensus estimates predict 4.3%.
Forrester clients: Forrester continues to monitor economic indicators as well as consumer spending growth and changing consumer behavior. Watch for our quarterly insights into the macroeconomic indicators impacting consumers and businesses and what these mean for your business. Explore our first report in this series, US Economic Trends And Outlook, Q2 2025, and please schedule a guidance session or inquiry with us to discuss implications for your organization.
