As Catholic citizens navigating an unpredictable economic landscape, we are called not only to prudence and stewardship, but also to compassion and attentiveness to those most vulnerable. Recent economic data out of Washington paints a murky picture of the U.S. economy, underscoring the challenge of understanding our financial footing amid President Donald Trump’s sweeping policy shifts — including tariffs, tax changes, and budget adjustments.
Economists had hoped that Thursday’s data drop would offer clarity. Instead, it left many, in the words of CNN Business, still “scratching their heads.” The Commerce Department’s final estimate for first-quarter Gross Domestic Product (GDP) showed a decline of -0.5%, a downgrade from an earlier estimate of -0.2%, and a troubling sign that the economy contracted more sharply than expected in early 2025. GDP is considered the broadest measure of national economic health.
At the heart of the concern is consumer spending — what many economists describe as the “lifeblood of the U.S. economy.” According to the report, consumer spending grew at just 0.5% during the first quarter, down from a previous estimate of 1.2%. That marks the slowest pace in over four years. Meanwhile, “new data showed that unemployed Americans are having an increasingly harder time finding work,” the article stated, which could further strain consumer confidence and household stability.
For Catholic families striving to live faithfully amid economic anxiety, these trends carry personal implications. As the Catechism reminds us, “Work honors the Creator’s gifts and the talents received from him. It can also be redemptive” (CCC 2427). Yet when the job market falters, and families cannot meet their needs, we must be vigilant in both solidarity and advocacy.
Despite the overall downturn, there was a note of hope: business investment remained strong. Durable goods orders — particularly transportation equipment — jumped 16.4% last month. “New orders for non-defense capital goods excluding aircraft… grew at a rate of 1.7% in May,” according to the Commerce Department. This rebound may support growth in the second quarter.
Some of the economic instability appears tied to ongoing tariff policy. President Trump’s “on-again, off-again” approach to tariffs and trade has triggered uncertainty, prompting companies to front-load imports and contributing to a “massive trade deficit,” according to the report. That imbalance, where imports outpaced exports, was a major factor in the GDP decline.
Still, not all Federal Reserve officials see immediate cause for alarm. “The data today confirmed that continuing claims are going up because it takes a little longer to find a job,” said Mary Daly, president of the Federal Reserve Bank of San Francisco. “But… there are really no warning signs that it’s weakening,” she told Bloomberg.
Catholics are reminded that economic policy is never morally neutral. As Pope Leo XIII taught in Rerum Novarum, and as reiterated by Fratelli Tutti, just economic structures are essential to the dignity of the human person. We are challenged to examine not just economic indicators, but the human cost — who benefits, and who suffers. As many Americans now face delayed hiring and reduced purchasing power, the Church’s social teaching urges us to elevate the voices of workers, the poor, and the struggling middle class.
The coming months will be critical. Whether the Federal Reserve cuts interest rates, as some speculate, or whether the administration adjusts its tariff strategy, remains to be seen. “The revisions to GDP won’t have significant implications for the Federal Reserve,” said Ryan Sweet of Oxford Economics, “The Fed is focused on the inflation risks stemming from tariffs and the labor market.”
As people of faith, we must remain vigilant, prayerful, and active in seeking policies that honor human dignity, support the common good, and reflect the moral priorities of a nation under God.
