Is a U.S. Economic Recession Looming This Summer? The Path: Early Buying in April, Weak Transport in May, Layoffs in June

TradingKey - Amid the shock of Trump's tariffs, signs of early purchasing and inventory replenishment have emerged among major U.S. companies, as reflected in their earnings reports and guidance. Wall Street economists predict that the economic downturn triggered by the U.S. trade war will become evident in summer economic data.

Emanuel Abecasis, an economist at Goldman Sachs, believes that before "hard data" begins to weaken in the latter part of summer, survey data may continue to show weakness. By then, official statistics could start reflecting signs of rising prices, weakening spending, and slowing hiring.

Goldman Sachs noted that when a specific event causes an economic slowdown, it typically takes about four months for economic data to reflect such "consequences." The bank estimates a 45% probability of a U.S. recession occurring within the next 12 months.

According to the latest survey from the University of Michigan, the U.S. consumer confidence index fell from 57 in March to 52.2, marking the fourth consecutive monthly decline and hitting its lowest level since July 2022. One-year inflation expectation for April rose to 6.5%, the highest since 1981.

Asset management giant Apollo holds an even more pessimistic outlook, estimating a 90% probability of a U.S. recession. Moody's, the rating agency, stated that if policy uncertainty remains extremely high, the U.S. could fall into a recession within the next three to four weeks.

Apollo outlined a potential path for a U.S. economic recession: On April 2, the U.S. announced reciprocal tariffs; container shipping times range from 20 to 40 days; by early to mid-May, the number of containers arriving at U.S. ports is expected to plummet; transportation from ports to cities via trucks or railways takes 1 to 10 days; store shelves gradually empty, and sales slow; by late May to early June, layoffs begin in the U.S. freight and retail sectors; and by summer 2025, the U.S. enters a recession.

In fact, signs of declining port activity in the U.S. are appearing earlier than economists anticipated. According to the Port Optimizer, shipping volumes at the Port of Los Angeles, the largest U.S. port, are projected to drop by 28% in the week starting April 27 compared to the previous week.

A logistics company warned that if the trade war remains unresolved, trucking volumes at the Port of Los Angeles could collapse by 50% in the coming weeks, leading to massive layoffs among truck drivers.