We're gonna get ambiguous signals in the economic data 😵‍💫

Tariff talk is messing up economic activity in conflicting ways 🫠

We’re halfway through April, which means we’re about to get a ton of hard March economic data — as well as a flurry of Q1 earnings announcements.

On Wednesday, we’ll get March retail sales and industrial production. On Thursday, we’ll get building permits and housing starts. Next week, we’ll get new home sales, existing home sales, and durable goods orders. And the week after that, we’ll get personal income, personal spending, and Q1 GDP.

We’ve already gotten a lot of soft sentiment-oriented data. From it, we’ve learned small business optimism and consumer confidence is in the dumps. Sentiment among CEOs and CFOs has turned south. Purchasing managers at manufacturing and services firms have also become increasingly cautious. And it’s all because of the Trump administration’s volatile position on tariffs — which most informed people agree are net negative for the economy.

But gloomy sentiment data doesn’t mean the hard data — which reflects how consumers and business actually behaved — will obviously be weak.

Why?

Because the threat of tariffs has affected behavior in conflicting ways: