The most stark example was an abrupt slowdown in job growth in recent months. After expanding at an average monthly pace of nearly 123,000 jobs during the first four months of 2025, the labor market added an average of just 35,000 jobs during the last three months.
Although real GDP increased at a solid 3% annualized rate in the second quarter, much of that was the result of a sharp drop in imports from the first quarter’s surge. Stripping away the impact of trade and government spending, the economy grew at its slowest pace since the fourth quarter of 2022.
The news isn’t all bad, however. The unemployment rate is still historically low and wage growth remains solid. Moreover, the elevated inflation that marked much of the post-pandemic economy has dipped below 3% on a 12-month basis, which is relieving some of the pressure on household budgets.
All told, the economic signals remain mixed, and this likely reflects the heightened degree of uncertainty among both consumers and businesses. Until the fog clears, the economic outlook will be somewhat muted.
Looking forward, the National Restaurant Association projects somewhat dampened growth during the second half of 2025 and into 2026. While a modest economic expansion remains the base case, elevated downside risks continue to cloud the forecast.
This article presents the latest trends in key economic indicators as well as an outlook for the year ahead.
Job growth slowed significantly in recent months
Job growth in the national economy slowed dramatically in recent months, calling into question the years-long resiliency of the labor market. Employers added a net 73,000 jobs on a seasonally-adjusted basis in July, which followed downward revised estimates in both May and June. As a result, the average gain of just 35,000 jobs during the last 3 months was well below the 123,000 jobs added during the first 4 months of the year.
Unemployment rate remains historically low
The jobless rate ticked higher from the sub-4% lows of 2022 and 2023, but continues to suggest that the economy is at or near full employment. The national unemployment rate stood at 4.2% in July, which represented the 45th consecutive month at a level of 4.2% or lower. 
Economy projected to add 1 million jobs in 2025
Although job growth slowed in recent months, the labor market expansion is expected to continue throughout 2025 – albeit at a more modest pace. The national economy is projected to add a net 1 million jobs during 2025, which would be half of the 2 million jobs added during 2024. Despite the slowdown, 2025 is expected to represent the 5th consecutive year of job growth, with total gains in excess of 17 million jobs. 
Personal income growth expected to slow
Wage growth is expected to continue in 2025, but decelerating employment gains will likely dampen the increase in aggregate income. Disposable personal income – a key driver of restaurant sales – is projected to increase at an inflation-adjusted rate of 1.4% in 2025. While still positive, that would be down from a stronger 2.7% gain in 2024. 
Inflation remains sticky
After hitting a peak of 9.1% in mid-2022 – the strongest 12-month increase in 4 decades – growth in consumer prices moderated in the months that followed. Although progress has been made toward reaching the Federal Reserve’s 2% target level, prices remain sticky in many areas. Adding to the uncertainty is the potential impact that tariffs will have on consumer prices during the second half of 2025. As a result, the National Restaurant Association expects the CPI to increase 3.0% in 2025 on an average annual basis, which would match the 3.0% gain registered in 2024. 
Economic growth expected to remain modest
Overall, the expectation is that the U.S. economy will slow significantly in 2025, with continued modest gains projected for 2026. Real Gross Domestic Product (GDP) – the value of goods and services produced in the United States – is projected to increase at a 1.7% rate in 2025. That would be down from the gains of nearly 3% in both 2023 and 2024, and would represent the weakest annual gain since 2020. 
