Barclays cancels its warning about a U.S. economic recession, forecasting a growth of 0.5% this year and 1.6% next year.

According to INV analysis reports, the United States and China recently reached a temporary tariff suspension agreement, causing a slight pump in the US stock market. Many people still worry that the US-China trade war will unfold new scenarios in the future. However, the new agreement signed between the US and China has led Barclays Bank to cancel its warning about a recession in the US economy this year. Investors are turning their attention to the upcoming consumer confidence survey, which has seen a significant decline in data over the past few months due to concerns arising from tariffs.

U.S. stock indices slightly pump

U.S. stock indexes rose on Friday. As of 06:39 Eastern Time (10:39 GMT), Dow futures were up 152 points, a gain of 0.4%, S&P 500 futures rose 16 points, a gain of 0.3%, and Nasdaq 100 futures increased by 50 points, a gain of 0.2%.

The major stock indices on Wall Street fluctuated on Thursday, as investors remain concerned that the trade truce reached between the U.S. and China may not fully alleviate the worries caused by Trump's aggressive tariff policies. Walmart stated that the increase in tariffs in the U.S. will force them to raise prices in the coming weeks. Some analysts suggest that other companies may soon follow suit with price hikes. The market is assessing a batch of new economic data, which shows an unexpected cooling in producer prices and weak core retail sales.

James Knightley, Chief International Economist at ING, stated in a report to clients that April retail figures show that after a surge in spending in March, businesses’ preemptive purchasing behavior to cope with tariff-related price increases has quickly receded, and the Producer Price Index (Producer Price Index)) remains sluggish, indicating that the current situation of companies absorbing high costs will not last long.

Economists pay attention to the University of Michigan Consumer Confidence Survey report.

Economists are paying attention to the University of Michigan consumer confidence survey. Experts predict that after a decline in April data, May's data will see a slight rebound. Against the backdrop of escalating tariff concerns, the survey shows that household optimism has decreased in recent months, while expectations of inflationary pressures have risen. Nonetheless, there is still debate about the extent to which these so-called "soft data" can reflect the actual economic situation.

Barclays cancels warning about US economic recession

Barclays Bank stated in a report released Thursday evening that the trade agreement between Washington and Beijing has prompted the bank to raise its forecast for U.S. economic growth, predicting that the U.S. will not fall into recession. The institution currently estimates that the U.S. economy will grow by 0.5% this year and 1.6% next year, up from previous forecasts of -0.3% and 1.5%.

The reduction of uncertainty and improvement in the economic backdrop have also prompted Barclays to raise its growth expectations for the Eurozone. Currently, Barclays forecasts that economic growth will remain flat this year, compared to a previous forecast of a contraction of 0.2%.

Barclays still expects a technical recession in the Eurozone in the second half of 2025, but the contraction in economic growth will be less than previously forecasted. Barclays stated in a report that overall, it remains pessimistic about the growth prospects of the Eurozone, as uncertainty is still high, and the mutual tariff negotiations between the EU and the US are still at a technical level, with no signs of progress.

This article reports that Barclays has canceled its warning about a recession in the U.S., estimating a growth of 0.5% this year and 1.6% next year, originally appearing in Chain News ABMedia.