Problem for US Fed: Recession warnings are everywhere, except in the data

Americans are spending less at McDonald's. Fewer container ships are expected at the Port of Los Angeles. Procter & Gamble is raising prices.

- Ben Casselman and Colby Smith

NEW YORK -

Evidence for the economic impact of US President Donald Trump's trade wars is everywhere - except, for the most part, in economic data itself. Consumer spending has not fallen. Layoffs have not risen. Businesses have not stopped investing in equipment or buying supplies.

Economists say it is a matter of time before the impact of tariffs and the uncertainty that Mr. Trump's on-again, off-again approach to trade policy has created begin to show up in the hard data.

But until then, they are left sifting through crumbs of evidence that would not get a second glance in more normal times: Customs revenue, hotel bookings in Las Vegas, freight shipments by truck and rail.

Among those hunting for titbits of evidence are officials at the US Federal Reserve, who are trying to figure out how to set monetary policy in an environment where tariff policy can shift multiple times between meetings.

Policymakers held interest rates steady on May 7, in part because of that uncertainty. But they will be watching for signs that the economy is changing direction faster than the usual indicators can capture.

The situation is reminiscent of the early days of the Covid-19 pandemic, when economists scoured the internet for alternative measures.