Here’s a simple breakdown of the current economic conditions, including recent events like tariffs, stock market performance, and other key factors.
February 2025 Economic Conditions to Consider
Tariffs and Trade
- President Trump recently announced new tariffs:
- 25% on imports from Mexico and Canada, except energy (10% tariff).
- 10% on imports from China.
- However, tariffs on Mexico and Canada have been delayed by one month, while those on China are already in effect. China has retaliated with its own tariffs on U.S. goods.
- These trade actions may cause higher prices for imported goods and could impact businesses reliant on global supply chains.
Stock Market Conditions
- The stock market started 2025 on a positive note:
- The S&P 500 is up 3.15% year-to-date, while the NASDAQ lags slightly at 2.00%.
- International stocks are leading with a 5.35% gain so far this year.
- Technology stocks faced volatility after a Chinese AI company introduced a low-cost model, impacting chipmakers like Nvidia and Broadcom.
- Despite some turbulence, most sectors are performing well, with healthcare, financials, and industrials showing strong returns.
U.S. Economic Growth
- The U.S. economy is expected to grow by 2.0%-2.3% in 2025, driven by cooling inflation and gradual Federal Reserve interest rate cuts.
- Inflation is stabilizing closer to the Fed’s target of 2%, which could ease pressure on consumers and businesses.
- Risks remain, including potential job market weakness or further economic shocks from tariffs.
Global Economic Trends
- Globally, growth is uneven:
- Europe and China are showing signs of improvement but face challenges from trade tensions and policy uncertainty.
- The U.S. dollar remains strong due to geopolitical tensions, though some analysts expect it to weaken later in the year.
How February’s Economic Conditions Can Impact You
- Investors: Diversification is key as international markets outpace the U.S., but tech stocks may face continued volatility.
- Consumers: Be prepared for possible price increases on imported goods due to tariffs.
- Businesses: Monitor supply chain costs as trade policies evolve.
About the Financial Planning Author
Alexander Langan, J.D, CFBS, serves as the Chief Investment Officer at Langan Financial Group. In this role, he manages investment portfolios, acts as a fiduciary for group retirement plans, and consults with clients regarding their financial goals, risk tolerance, and asset allocation.
With a focus on ERISA Law, Alex graduated cum laude from Widener Commonwealth Law School. He then clerked for the Supreme Court of Pennsylvania and worked in the Legal Office of the Pennsylvania Office of the Budget, where he assisted in directing and advising policy determinations on state and federal tax, administrative law, and contractual issues.
Alex is also passionate about giving back to the community, and has participated in The Foundation of Enhancing Communities’ Emerging Philanthropist Program, volunteers at his church, and serves as a board member of Samara: The Center of Individual & Family Growth. Outside of work and volunteering, Alex enjoys his time with his wife Sarah, and their three children, Rory, Patrick, and Ava.
About Langan Financial Group: Financial Advisors
Langan Financial Group is an award-winning financial planning firm with offices in York, Pennsylvania and Harrisburg, Pa.
With over 100+ 5-star reviews, Langan Financial Group is an independent financial planning firm established in 1985, offering a broad range of financial planning services.
With an open architecture platform, our advisors have access to a diverse range of products, free from any sales quotas.
Our team of 9 financial experts, each with unique specialties, enhances our ability to focus on delivering value to our clients.
Disclosure
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice.
Please consult legal or tax professionals for specific information regarding your individual situation.
The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.
Investment Advisor Representative, Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor. Cambridge and Langan Financial Group, LLC are not affiliated.
Cambridge does not offer tax or legal advice.
