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University of Michigan economists say tariffs will slow growth despite solid near-term momentum
Summary
University of Michigan economists presented a forecast showing a modest national rebound this year but material downside risk from broad tariffs; Michigan'specific growth will be weaker and the state's labor market is cooling, the presenters said.
Yinyu Zhang, senior economist at the University of Michigan Research Seminar in Quantitative Economics (RSQE), told the Consensus Revenue Estimating Conference on May 20 that the U.S. economy entered the quarter "in a decent shape" but that broad-based tariffs are expected to impose a meaningful drag beginning in the third quarter.
Zhang said the RSQE baseline projects a return to modest positive GDP growth later this year, with quarterly annualized growth near 1.3 percent in coming quarters and calendar-year growth for 2025 falling roughly in half from 2024. "We expect tariffs to start affecting consumption and business…
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