Dollar General set a quarterly sales record of $10.44 billion and upgraded its annual profit and sales outlook as Americans tighten their budgets and spend more at bargain stores and off-price retailers amid economic uncertainty.
The U.S. economy shrank at a 0.2% annual pace from January through March, the first drop in three years, as President Donald Trump’s trade wars dented spending by businesses. Consumer spending slowed sharply.
Dollar General, based in Goodlettsville, Tennessee, stands out because it is raising its expectations for the year while most traditional retailers, like Macy’s, Target or Best Buy, are dialing back profit and or sales projections, citing anxious customers or the impact of tariffs.
For the period ended May 2, Dollar General’s sales climbed 5% to $10.44 billion from $9.91 billion. That’s better than the $10.29 billion that Wall Street was expecting, according to a poll by Zacks Investment Research.
Sales at stores open at least a year, a key indicator of a retailer’s health, increased 2.4%.
Customer traffic dipped 0.3%, but the average transaction amount rose 2.7%.
Shares jumped more than 15% Tuesday, and shares of rival Dollar Tree, which reports its quarterly performance Wednesday, rose 6%.
Dollar General earned $391.9 million, or $1.78 per share, in the quarter, blowing past the $1.47 per share that Wall Street had expected, as well as the $363.3 million profit it recorded during the same period last year.
Dollar General said that even though it topped its own expectations, there is a lot of uncertainty about how tariffs will impact its business and its customers for the remainder of the year.
People are trading down, or visiting bargain chains, as they seek to extend their spending, but lower-income Americans are much more vulnerable.
“While the macro backdrop continues to be broadly unhelpful, with core lower income consumers still facing considerable pressure on their finances, this was mitigated during the quarter by consumers gently stocking up on things in anticipation of tariffs,” Neil Saunders, managing director of GlobalData, said in a statement.
Dollar General is now projecting 2025 earnings in a range of about $5.20 to $5.80 per share. Its prior earnings forecast was for approximately $5.10 to $5.80 per share.
Analysts surveyed by FactSet are looking for earnings of $5.61 per share.
Sales are expected to climb approximately 3.7% to 4.7%. Dollar General previously predicted sales growth of about 3.4% to 4.4%. Same-store sales growth is now expected to be approximately 1.5% to 2.5% up from a prior outlook for about 1.2% to 2.2% growth.
By PAUL WISEMAN, Associated Press Economics Writer
WASHINGTON (AP) — U.S. economic growth will slow to 1.6% this year from 2.8% last year as President Donald Trump’s erratic trade wars disrupt global commerce, drive up costs and leave businesses and consumers paralyzed by uncertainty.
The Organization for Economic Cooperation and Development forecast Tuesday that the U.S. economy — the world’s largest — will slow further to just 1.5% in 2026. Trump’s policies have raised average U.S. tariff rates from around 2.5% when he returned to the White House to 15.4%, highest since 1938, according to the OECD. Tariffs raise costs for consumers and American manufacturers that rely on imported raw materials and components.
World economic growth will slow to just 2.9% this year and stay there in 2026, according to the OECD’s forecast. It marks a substantial deceleration from growth of 3.3% global growth last year and 3.4% in 2023.
FILE – Shipping containers are seen ready for transport at the Guangzhou Port in the Nansha district in southern China’s Guangdong province, April 17, 2025. (AP Photo/Ng Han Guan, File)
The world economy has proven remarkably resilient in recent years, continuing to expand steadily — though unspectacularly — in the face of global shocks such as the COVID-19 pandemic and Russia’s invasion of Ukraine.
But global trade and the economic outlook have been clouded by Trump’s sweeping taxes on imports, the unpredictable way he’s rolled them out and the threat of retaliation from other countries.
Reversing decades of U.S. policy in favor of freer world trade, Trump has levied 10% taxes — tariffs — on imports from almost every country on earth along with specific duties on steel, aluminum and autos. He’s also threatened more import taxes, including a doubling of his tariffs on steel and aluminum to 50%.
Without mentioning Trump by name, OECD chief economist Álvaro Pereira wrote in a commentary that accompanied the forecast that “we have seen a significant increase in trade barriers as well as in economic and trade policy uncertainty. This sharp rise in uncertainty has negatively impacted business and consumer confidence and is set to hold back trade and investment.”
Adding to the uncertainty over Trump’s trade wars: A federal court in New York last week blocked most of Trump’s tariffs, ruling that he’d overstepped his authority in imposing them. Then an appeals court allowed the Trump administration to continue collecting the taxes while appeals worked their way through the U.S. courts.
China — the world’s second-biggest economy — is forecast to see growth decelerate from 5% last year to 4.7% in 2025 and 4.3% in 2026. Chinese exporters will be hurt by Trump’s tariffs, hobbling an economy already weakened by the collapse of the nation’s real estate market. Some of the damage will be offset by help from the government: Beijing last month outlined plans to cut interest rates and encourage bank lending as well as allocating more money for factory upgrades and elder care, among other things.
The 20 countries that share the euro currency will collectively see economic growth pick up from 0.8% last year to 1% in 2025 and 1.2% next year, the OECD said, helped by interest rate cuts from the European Central Bank.
The Paris-based OECD, comprising 38 member countries, works to promote international trade and prosperity and issues periodic reports and analyses.
By PAUL WISEMAN and LINDSAY WHITEHURST, Associated Press
WASHINGTON (AP) — President Donald Trump has audaciously claimed virtually unlimited power to bypass Congress and impose sweeping taxes on foreign products.
Now a federal court has thrown a roadblock in his path.
But Trump’s trade wars are far from over. The Court of Appeals for the Federal Circuit on Thursday allowed the president to temporarily continue collecting the tariffs under the emergency powers law while he appeals the trade court’s decision.
The administration also has other ways to pursue the president’s goal of using tariffs to lure factories back to America, raise money for the U.S. Treasury and pressure other countries into bending to his will.
Financial markets, which would welcome an end to Trump’s tariffs, had a muted response to the news Thursday; stocks rose modestly.
“Investors are not getting too carried away, presumably in the expectation that the White House will find a workaround that allows them to continue to pursue their trade agenda,’’ said Matthew Ryan, head of market strategy at the financial services firm Ebury.
Trump’s IEEPA tariffs are being challenged in at least seven lawsuits. In the ruling Wednesday, the trade court combined two of the cases — one brought by five small businesses and another by 12 U.S. states.
The U.S. Court of International Trade has jurisdiction over civil cases involving trade. The legal challenge to Trump’s tariff sis widely expected to end up at the U.S. Supreme Court.
Trump on April 2 — Liberation Day, he called it — imposed so-called reciprocal tariffs of up to 50% on countries with which the United States runs a trade deficit and 10% baseline tariffs on almost everybody else. He later suspended the reciprocal tariffs for 90 days to give countries time to negotiate trade agreements with the United States — and reduce their barriers to American exports. But he kept the baseline tariffs in place.
Claiming extraordinary power to act without congressional approval, he justified the taxes under IEEPA by declaring the United States’ longstanding trade deficits “a national emergency.”
“The reason that he chose IEEPA was he thought he could do this unilaterally without much oversight by Congress,” said Jeffrey Schwab, senior counsel and director of litigation at the nonprofit Liberty Justice Center. He represented the five small businesses before the trade court.
In February, he’d invoked the law to impose tariffs on Canada, Mexico and China, saying that the illegal flow of immigrants and drugs across the U.S. border amounted to a national emergency and that the three countries needed to do more to stop it.
The U.S. Constitution gives Congress the power to set taxes, including tariffs. But lawmakers have gradually let presidents assume more power over tariffs — and Trump has made the most of it.
Why did the court rule against the president?
The administration had argued that courts had approved then-President Richard Nixon’s emergency use of tariffs in the economic chaos that followed his decision to end a policy that linked the U.S. dollar to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language later used in IEEPA.
The court rejected the administration’s argument this time, deciding that Trump’s sweeping tariffs exceeded his authority to regulate imports under IEEPA. It also said the tariffs did nothing to deal with problems they were supposed to address. In their case, the states noted that America’s trade deficits hardly amount to a sudden emergency. The United States has racked them up for 49 straight years in good times and bad.
Another federal judge also blocked Trump’s use of an emergency powers law to impose tariffs on Thursday. The ruling from U.S. District Judge Rudolph Contreras came in a lawsuit from two Illinois-based educational toy companies. The ruling only blocks the collection of tariffs from the companies who sued, and was handed down the day after the trade court’s broader finding.
So where does this leave Trump’s trade agenda?
Wendy Cutler, a former U.S. trade official who is now vice president at the Asia Society Policy Institute, says the court’s decision “throws the president’s trade policy into turmoil.”
Other countries may be reluctant to make concessions to Trump during the 90-day pause if there’s a chance the courts will uphold the decision striking down the IEEPA tariffs. “Can those negotiations move forward?” said Antonio Rivera, a partner at ArentFox Schiff and a former Customs and Border Protection attorney.
Likewise, companies will have to reassess the way they run their supply chains, perhaps speeding up shipments to the United States to offset the risk that the tariffs will be reinstated on appeal.
Still, the ruling leaves in place other Trump tariffs, including those on foreign steel, aluminum and autos. Those levies were invoked under a different legal authority — Section 232 of the Trade Expansion Act of 1962 — that requires a Commerce Department investigation and cannot simply be imposed at the president’s own discretion.
Trump still has the authority to raise those Section 232 tariffs. He can also pursue new ones. The Commerce Department, for instance, last month launched a Section 232 investigation into the national security implications of pharmaceutical imports.
The court also left in place tariffs Trump imposed on China in his first term— and President Joe Biden kept — in a dispute over Beijing’s use of hard-nose tactics to give Chinese companies an edge in advanced technology. The U.S. alleged that China unfairly subsidized its own firms, forced companies from the U.S. and other foreign countries to hand over trade secrets and even engaged in cybertheft. Trump has leeway to expand those tariffs if he wants to put more pressure on China.
The trade court also noted Wednesday that Trump retains more limited power to impose tariffs to address trade deficits under another statute, the Trade Act of 1974. But that law restricts tariffs to 15% and to just 150 days on countries with which the United States runs big trade deficits.
What is the likely the economic and financial fallout from the decision?
When the IEEPA tariffs were in place, America’s average tariff rate was 15%, the highest in decades and up from 2.5% before Trump’s tariff onslaught began this year. Without them, the U.S. tariff rate is still a hefty 6.5%, according to economists Stephen Brown and Jennifer McKeown of Capital Economics.
They say the U.S. economy would grow faster in the second half of 2025 — at a 2% annual rate, up from the 1.5% they’d been forecasting — without the weight of the IEEPA tariffs. Prices also wouldn’t rise as fast.
Importers may get relief. Posting on X, formerly known as Twitter, on Thursday, lawyer Peter Harrell, a fellow at the Carnegie Endowment for International Peace, wrote that if the trade court’s decision “is upheld, importers should eventually be able to get a refund of (IEEPA) tariffs paid to date. But the government will probably seek to avoid paying refunds until appeals are exhausted.″
AP Economics Writer Christopher Rugaber contributed to this story.
WASHINGTON (AP) — The U.S. economy shrank at a 0.2% annual pace from January through March, the first drop in three years, as President Donald Trump’s trade wars disrupted business, the government said Thursday in a slight upgrade of its initial estimate.
First-quarter growth was brought down by a surge in imports as companies in the United States hurried to bring in foreign goods before the president imposed massive import taxes.
The January-March drop in gross domestic product — the nation’s output of goods and services — reversed a 2.4% gain in the fourth quarter of 2024. Imports grew at a 42.6% pace, fastest since third-quarter 2020, and shaved more than 5 percentage points off GDP growth. Consumer spending also slowed sharply.
And federal government spending fell at a 4.6% annual pace, the biggest drop in three years.
Trade deficits reduce GDP. But that’s mainly a matter of mathematics. GDP is supposed to count only what’s produced domestically. So imports — which the government counts as consumer spending in the GDP report when you buy, say, Costa Rican coffee — have to be subtracted out to keep them from artificially inflating domestic production.
The first-quarter import surge likely won’t be repeated in the April-June quarter and therefore shouldn’t weigh on GDP.
From January through March, business investment surged 24.4%. An increase in inventories — as businesses stocked up ahead of the tariffs — added more than 2.6 percentage points to first-quarter GDP growth.
A category within the GDP data that measures the economy’s underlying strength rose at a 2.5% annual rate from January through March, down from 2.9% in the fourth quarter of 2024 but still solid. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.
Trump’s tariffs have added considerable uncertainty to the economic outlook. He has imposed 10% tariffs on almost every country on earth in addition to levies on steel, aluminum and autos. A federal court on Wednesday blocked the 10% tariffs as well as specific taxes on Canadian, Mexican and Chinese imports, saying the president had overstepped his authority.
Thursday’s report was the second of three Commerce Department estimates of first-quarter GDP. The final version arrives June 26.
Businesses involved with international trade don’t need to agree with the tariff policies of the Trump administration — many probably don’t. But they should try to understand the thinking behind them and why they are likely here to stay.
“So (trade) deals are something that can help adjust the tariffs, but again, 10% seems really sticky at the moment,” Penelope Naas, a trade expert with the German Marshall Fund, told a Denver crowd during lunch at World Trade Day. She was introduced as a “tariffologist.”
Tariffs are such a stressful topic that the World Trade Center, sponsor of the annual event, offered a “Tariff Therapy Oasis” room for attendees.
Naas put up a clip of a New York Times advertisement that Donald Trump purchased in 1987 to criticize trade deficits. In repeated interviews over the years, he has used the same language about the country being ripped off and people taking advantage of the U.S. or failing to pay for their fair share for military security.
Trump promotes four key benefits from higher tariffs, Naas said. They will reduce the country’s trade deficit, encourage more domestic manufacturing, create political leverage over trading partners and companies, and generate revenues for the country, which can be used to reduce budget deficits or fund other priorities, such as the tax cuts the House approved this week.
Despite his strong convictions, Trump can be swayed by the fallout his supporters are facing, the opinions of CEOs he respects and complaints from Republican members of Congress, not to mention the action of the bond markets, said Naas, who urged businesses to lobby their political representatives so they understand the hit they are taking.
When JPMorgan Chase CEO Jamie Dimon warned on May 8 on Fox News that the tariffs could crash the economy, the administration announced a 90-day pause on reciprocal tariffs the next day, she said. When the CEO of Walmart warned about empty store shelves because of tariffs of 145% on Chinese goods, the administration announced a deal to reduce them to 30% for 90 days.
Apple CEO Tim Cook’s Oval Office visit, which was likely used to point out how iPhones couldn’t be produced easily outside of China, resulted in a high tariff exclusion for smartphones and other electronic goods made in China.
And the influence can also work in the other direction. A 100% tariff on movies produced outside the U.S. seemingly came out of the blue, but it followed a meeting Trump had with actor and producer Jon Voight, who advocated for the levy to protect Hollywood.
Canada, the European Union and China have strategically used Trump’s concern for his base to target tariffs on specific products, such as rice from Louisiana and bourbon from Kentucky. Their pushback has also thwarted expectations for a quick resolution.
More than 60 countries have been hit with reciprocal tariffs. But trade deals are complicated and can take a long time to work out. The administration has found itself understaffed in terms of having the capacity to reach so many agreements at the same time, Naas said.
The end game, however, appears to be a reset of the trade relationship between the U.S. and China, which is pushing to become a top military power under President Xi Jinping and has come to dominate manufacturing globally.
“China has taken over manufacturing around the world and while they consume about 55% of what they make, they export about 45%. And that is taking over and damaging every country’s manufacturing,” Naas said.
The U.S. is especially vulnerable to disruptions from China when it comes to smartphones, computer monitors, video game consoles, energy storage systems, baby carriages, toys and recreational gear. China is also a dominant supplier of the ingredients needed to create antibiotics and of rare earth minerals.
China’s military is not strong enough yet to defeat the U.S. and Europe. To compensate, the country has adopted an approach to make any enemy “blind, deaf and dumb” in the first hours of an outbreak of war, Naas said.
Chinese electronic products, such as routers from TP-Link, have reportedly been used to launch cyberattacks by Chinese state actors. Naas said electronic products from China have been found with embedded kill switches that can’t be explained by any benign intent, including recently in solar power systems.
NEW YORK (AP) — Stocks drifted to a mixed close on Wall Street Thursday in what has been a rocky week so far because of worries coming out of the bond market about the U.S. government’s mounting debt.
Trading remained choppy throughout most of the day following Wednesday’s big slump for the S&P 500. That loss has put the benchmark index on track for its worst week in the last seven.
The S&P 500 slipped 2.60 points, or less than 0.1%, to close at 5,842.01. The Dow Jones Industrial Average fell 1.35 points, or less than 0.1%, to 41,859.09. The Nasdaq composite rose 53.09 points, or 0.3% to 18,925.73.
Technology stocks did most of the heavy lifting for the broader market. The majority of stocks within the S&P 500 lost ground, but gains for technology companies with outsized values offset those losses. Google’s parent Alphabet jumped 1.4% and Nvidia rose 0.8%.
The choppy trading this week and sharp decline for stocks on Wednesday follows several weeks of mostly gains that have brought the S&P 500 back within 5% of its all-time high.
“We’ve had a good bounce here, but the market is looking for some excuse to take some money off the table,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.
Treasury yields held a bit steadier in the bond market, but only after oscillating earlier in the morning after the House of Representatives approved a bill that would cut taxes and could add trillions of dollars to the U.S. debt. The bond market has been the epicenter of Wall Street’s action this week. Yields have been broadly on the rise in part because of worries about the U.S. government’s spiraling debt.
Besides making it more expensive for the U.S. government to borrow to pay its bills, higher Treasury yields can also filter into the rest of the economy and make it tougher for U.S. households and businesses to get their own loans. Higher yields also discourage investors from paying high prices for stocks and other investments.
The yield on the 10-year Treasury climbed as high as 4.63% before the U.S. stock market opened for trading, before receding to 4.54%. It stood at 4.58% late Wednesday and was as low as 4.01% early last month. The two-year yield, which more closely tracks expectations for action by the Federal Reserve, slipped to 3.99% from 4.02% late Wednesday.
The House’s multitrillion-dollar spending bill, which aims to extend some $4.5 trillion in tax breaks from President Donald Trump’s first term while adding others, is expected to undergo some changes when it gets to the Senate for a vote.
The legislation also includes a speedier rollback of production tax credits for clean electricity projects, which sent shares of solar companies tumbling. Sunrun dropped 37.1%, Enphase Energy fell 19.6% and First Solar slid 4.3%.
Health care stocks were also falling early Thursday after the Centers for Medicare & Medicaid Services said it was immediately expanding its auditing of Medicare Advantage plans. UnitedHealth Group fell 2.1% and Humana lost 7.6%.
Wall Street had several economic updates on Thursday.
The number of Americans filing unemployment claims last week fell slightly. The broader employment market has remained strong, though businesses remain worried about the economic uncertainty amid a trade war.
The market had briefly turned higher earlier in the day following a better-than-expected report on manufacturing and services in the U.S. The survey from S&P Global showed growth for both areas in May following a sluggish April.
“Business confidence has improved in May from the worrying slump seen in April, with gloom about prospects for the year ahead lifting somewhat thanks largely to the pause on higher rate tariffs,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
The report also reflected the impact of the trade war on supply chains, prices and concerns about the economic picture moving forward. New orders from businesses were the big driver for the improvement, but much of that was from businesses trying to get ahead of a potentially hefty round of tariffs that could hit the economy in July.
“Concerns over tariff-related supply shortages and price rises led to the largest accumulation of input inventories recorded since survey data were first available 18 years ago,” Williamson said.
A 90-day pause on some of President Donald Trump’s heftiest tariffs helped give some businesses and consumers some relief. They are already contending with broad tariffs and their impact on prices for a wide range of goods coming from trading partners around the world, including China, Canada and Mexico.
The overall rise in prices charged for goods and services in May was the steepest since August 2022, according to the S&P Global report.
Businesses have been warning investors about higher costs because of tariffs, prompting many to trim or pull financial forecasts. Many of them, including retail giant Walmart, have also warned consumers that they are raising prices on a wide range of goods because of higher import taxes.
In stock markets abroad, indexes fell across Europe and Asia. France’s CAC 40 dropped 0.6%, Hong Kong’s Hang Seng fell 1.2% and South Korea’s Kospi slid 1.2% for some of the sharper losses.
AP Business Writers Stan Choe, Matt Ott and Yuri Kageyama contributed.
NEW YORK (AP) — Wall Street slumped on Wednesday under the weight of pressure from the bond market, where Treasury yields climbed on worries about the U.S. government’s spiraling debt and other concerns.
The S&P 500 fell 1.6% for a second straight drop after breaking a six-day winning streak. The Dow Jones Industrial Average lost 816 points, or 1.9%, while the Nasdaq composite sank 1.4%.
Stocks had been drifting only modestly lower early in the day, after Target and other retailers gave mixed forecasts for upcoming profits amid uncertainty caused by President Donald Trump’s trade war. The market then turned sharply lower after the U.S. government released the results for its latest auction of 20-year bonds.
The government regularly sells such bonds, which is how it borrows money to pay its bills. In this auction, the U.S. government had to pay a yield as high as 5.047% to attract enough buyers to lend it a total of $16 billion over 20 years.
That helped push up yields for all kinds of other Treasurys, including the more widely followed 10-year Treasury. Its yield climbed to 4.59% from 4.48% late Tuesday and from just 4.01% early last month. That’s a notable move in the bond market.
“Bonds finally appear to be getting equities’ attention,” according to Jonathan Krinsky, chief market technician at BTIG, pointing in particular to the 30-year Treasury yield, which jumped back above 5% and approached its highest level since 2023.
Treasury yields have been on the rise in part because of concerns that tax cuts currently under consideration in Washington could pile trillions of more dollars onto the U.S. government’s debt. Concerns are also still brewing about how much Trump’s tariffs will push up on inflation in the United States.
The U.S. government’s bonds aren’t alone, and yields have been on the rise recently for developed economies around the world. That’s partly because their governments are continuing to borrow more cash to pay their bills, while central banks like the Federal Reserve have cut back on their own holdings of government bonds.
When the U.S. government has to pay more interest to borrow money, that can cause interest rates to rise for U.S. households and businesses too, including for mortgages, auto loans and credit cards. That in turn can slow the economy. Higher yields can also make investors less inclined to pay high prices for stocks and other kinds of investments.
Moody’s Ratings became the last of the three major ratings agencies late last week to downgrade the U.S. government’s credit rating on concerns that it may be heading toward an unsustainable amount of debt.
“We do not think that the downgrade matters by itself,” Bank of America strategists wrote in a BofA Global Research report, “but it has served as a wake up call for those investors who had been ignoring the ongoing fiscal discussion.”
On Wall Street, Target sank 5.2% after the retailer reported weaker profit and revenue than analysts expected for the start of the year.
The company said it felt some pain from boycotts by customers. It scaled back many diversity, equity and inclusion initiatives early this year following criticism by the White House and conservative activists, which drew its own backlash. Perhaps more worryingly for Wall Street, Target also cut its forecast for profit over the full year.
Carter’s, which sells apparel for babies and young children, sank 12.6% after cutting its dividend.
CEO Doug Palladini said the company made the move in part because of investments it anticipates making in upcoming years, as well as the possibility that it “may incur significantly higher product costs as the result of the new proposed tariffs on products imported into the United States.”
All told, the S&P 500 fell 95.85 points to 5,844.61. The Dow Jones Industrial Average fell 816.80 to 41,860.44, and the Nasdaq composite dropped 270.07 to 18,872.64.
U.S. stocks had recently recovered most of their steep losses from earlier in the year after Trump delayed or rolled back many of his stiff tariffs. Investors are hopeful that Trump will lower his tariffs more permanently after reaching trade deals with other countries.
In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia
A Denver District Court this month dismissed a lawsuit against Colorado’s Marijuana Enforcement Division that alleged the agency failed to protect consumers from contaminated products and ineffectively handled bad actors in the marketplace.
The ruling stated that San Luis Valley-based cannabis company Mammoth Farms attempted to circumvent the normal process for handling disputes involving regulation and enforcement by taking its issues to the court.
Mammoth Farms CEO Justin Trouard told The Denver Post he plans to appeal the decision.
Specifically, Mammoth Farms alleged that regulators ignored companies that are diverting legal weed to illicit markets in other states. It also alleged the agency’s marijuana tracking and testing protocols are insufficient to identify bad actors and allow potentially dangerous products to reach cannabis consumers.
In an industry bulletin, the Marijuana Enforcement Division said it remains dedicated to prioritizing consumer protections and preventing youth access, adding the agency will not tolerate businesses that deliberately disregard regulations to put youth and consumers at risk.
“When there are concerns about bad actors and safety risks in the regulated market, a licensee’s willingness to provide information is not something we take lightly,” said Dominique Mendiola, senior director of the enforcement division, in the statement. “There are legal requirements we must follow to maintain the integrity and legality of our agency actions, so it’s important to let investigations and due process take their course.”
DALLAS (AP) — Whether it’s a road trip to a nearby lake or jumping on a plane to explore a big city, Americans are expected to get away in record numbers over the long Memorial Day weekend even as economic and technical worries rattle the U.S. travel industry.
Over 45 million people — 1.4 million more than last year — will venture at least 50 miles from their homes between Thursday and next Monday, with the vast majority going by car, auto club organization AAA predicts. The holiday’s previous domestic travel record was set 20 years ago.
AAA spokesperson Aixa Diaz said the analysts who prepared the forecast weren’t sure when they started their research if concerns about the economy would cause fewer U.S. residents to plan getaways for the unofficial start of summer, but it doesn’t seem to be the case.
“People are still feeling pretty good about travel,” Diaz said, adding that some households and individuals may just opt to spend less money on their trips.
Hitting the (hopefully) open road
Like last year, about 87% of travelers are driving to their Memorial Day destinations, AAA said. About 39 million people, or 1 million more than last year, are expected to take road trips, which Diaz noted many families find easier and cheaper than flying.
“You leave whenever you want,” she said. “You can pack as much as you want in the car, make stops along the way.”
FILE – A motorist fills up their car at a Shell gas station ahead of Memorial Day, Friday, May 26, 2023, in Commerce City, Colo. (AP Photo/David Zalubowski, File)
AAA’s fuel tracker shows motorists can expect to pay less for gasoline this year; the U.S. average price on Sunday was $3.18 for a gallon of regular gas compared to $3.60 a year ago. Renting a vehicle and staying in a hotel also may cost less, according to the most recent Consumer Price Index.
Transportation-data firm INRIX anticipates the worst holiday traffic will be in the afternoons and evenings. It said drivers hitting the road on Thursday should leave before 12 p.m., and those planning Friday departures should leave before 11 a.m.
On Memorial Day itself, the firm predicts the most congested time on roads will be 4 p.m.-7 p.m.
What’s up with air travel?
In 2024, the Friday before Memorial Day was among the record-setting days for the number of airline passengers screened at U.S. airports. While airports should be busy again this Friday, the outlook for air travel this year is unclear.
Air safety has been on the minds of travelers after the deadly midair collision in January of a passenger jet and a U.S. Army helicopter above Washington, D.C. In recent weeks, flight delays and cancellations stemming from an air traffic controller shortage and equipment failures at a facility that directs in and out of the Newark, New Jersey, airport have also made some people wonder whether to get on a plane.
Most major U.S. airlines said they planned to reduce their scheduled domestic flights this summer, citing an ebb in economy passengers booking leisure trips. Bank of America reported this month that its credit card customers were spending less on flights and lodging.
But an analysis by aviation data provider Cirium of Memorial Day weekend tickets bought through online travel sites found an increase of about 3% across two dozen U.S. airports compared to last year. Bookings were down 10% for flights at Washington Dulles International Airport and down 9% for flights at Newark Liberty International Airport, according to Cirium’s data.
AAA said the weekend isn’t expected to set a passenger volume record, but the organization estimates that 3.6 million residents are set to fly over the holiday, nearly 2% more than last year. Airfares cost an average of 7.9% less last month than they did a year earlier, according to government price data.
The U.S. travel and tourism industry will watching during the weekend and the weeks ahead to see what might be in store for the summer travel season. Tourism industry experts have warned that anger about the Trump administration’s tariffs and rhetoric, and concern about tourist detentions at the U.S. border, have made citizens of some other countries less interested in traveling to the U.S.
FILE – Travelers move through Hartsfield-Jackson Atlanta International Airport ahead of Memorial Day, Friday, May 24, 2024, in Atlanta.(AP Photo/Mike Stewart, File)
The national statistics agency of Canada reported last week that the number of residents making return trips by air from the U.S. fell 20% in April compared to the same month a year earlier, while return trips by car were down 35%.
From big city lights to starry nights
Across Texas, reservations for day passes and camping spots were filling up at state parks for the weekend, said Tara Humphreys, director of interpretation with Texas State Parks. Stargazing parties were among events planned at parks across the state.
Bolstered by its theme parks and nearby cruise ports, Orlando, Florida, tops AAA’s list of most popular domestic destinations for the weekend. The grand opening of the city’s newest theme park, Universal’s Epic Universe, is scheduled for Thursday.
“A lot of schools are out those days prior to Memorial Day weekend and so it’s just another opportunity for them to enjoy the destination,” Visit Orlando President and CEO Casandra Matej said.
Long weekends are a good time to hop on a short flight to a big city, said Hayley Berg, lead economist at the travel site Hopper. She said top searches for the weekend on the site included New York, Miami and Las Vegas.
“Typically, we see over three-day weekends travelers look for destinations that are a quick flight away, so maybe like a couple hour flight at most,” she said.
Seattle is another top destination, according to AAA booking data, with Memorial Day weekend kicking off the peak Alaska cruise season. Michael Woody, Visit Seattle’s senior vice president and chief strategy officer, said that visitors can take in what the city has to offer and also fit in some time in nature.
AAA is also projecting about 2 million people will travel by train, bus or cruise ship over the weekend, an 8.5% increase over last year.
Weather conditions may factor into travel plans and holiday celebrations in some areas. Nick Novella, a meteorologist at the National Weather Service’s Climate Prediction Center, said parts of the Western U.S. were expected to see soaring temperatures over the holiday weekend, while there’s a possibility of heavy rain in parts of the East Coast.
By PAUL WISEMAN, CHRISTOPHER RUGABER and ANNE D’INNOCENZIO, Associated Press Business Writers
WASHINGTON (AP) — For months, American consumers and businesses have been hearing that President Trump’s massive import taxes – tariffs – would drive up prices and hurt the U.S. economy. But the latest economic reports don’t match the doom and gloom: Inflation actually eased last month, and hiring was solid in April.
For now, the disconnect has businesses and consumers struggling to reconcile what they were told to expect, what the numbers say and what they are seeing on the ground. Trump and his supporters are quick to point out that the trade wars of his first term didn’t translate into higher overall inflation across the economy.
So is it time to breathe easy?
Not yet, economists say. Trump’s tariffs are still huge – the highest since the Great Depression of the 1930s. They’re unpredictable: The president frequently announces tariffs only to suspend them days later and to conjure up new ones. And they are still working their way through the system.
“We had a good jobs report. We had a cool inflation report, and that’s great,” said Ernie Tedeschi, director of economics at Yale University’s Budget Lab. “But that should not give us comfort about what next month will be, particularly on inflation.’’
FILE – Trader Daniel Kryger works on the floor of the New York Stock Exchange on May 5, 2025. (AP Photo/Richard Drew, File)
Walmart, for example, warned its customers last week that prices will be going up for everything from clothing to car seats. Prices for some items like bananas have already increased.
True, the truce with China last Monday dramatically reduced the risks to the U.S. economy, and U.S. and global stock markets rallied last week in relief. The United States dropped the import tax that Trump angrily imposed on China – America’s third-biggest source of imports – from an eye-watering 145% to 30%; Beijing cut its retaliatory tariffs from 125% to 10%. Economists at JPMorgan Chase, who had forecast last month that the China tariffs made a recession likely, don’t expect one now.
Trump’s tariffs are the highest since the Great Depression
But even with the lower levies on China, the Yale Budget Lab reported that the cost of Trump’s trade war will be high. Climbing prices will reduce the purchasing power of the average household by $2,800. Shoe prices will rise 15% and clothing 14%. The tariffs will shave 0.7 percentage points off U.S. economic growth this year and increase the unemployment rate — now a low 4.2% — by nearly 0.4 percentage points.
The Yale Budget Lab estimates that Trump policies will push the average U.S. tariff rate to 17.8%, highest since 1934 and up from around 2.5% when Trump took office. (Other economists put his tariff rate at 14% to 15%.) During Trump’s first term, the average tariff rose just 1 percentage point despite all the headlines generated by trade policies. Now, according to the budget lab, they are rising 15 percentage points.
And the tariffs have only begun to bite. In April, the import tax revenues collected by U.S. Customs and Border Protection came to a tariff rate of just 4.5%, a fraction of what’s coming, Tedeschi said. That’s partly because of delays in rolling out the tariffs, including technical glitches that prevented customs agents from collecting them for a couple of weeks.
The full impact has also been delayed because companies beat the clock by bringing in foreign goods before Trump’s tariffs took effect. Retailers and importers had also largely halted shipments of shoes, clothes, toys, and other items due to new tariffs, but many are resuming imports from China.
Shown are shipping containers at the port of the port of New York & New Jersey in Elizabeth, N.J., Monday, May 12, 2025. (AP Photo/Matt Rourke)
Tedeschi, who was chief economist at President Joe Biden’s Council of Economic Advisers, also notes that it just takes time for tariffs to translate into higher prices. During Trump’s first term, his January 2018 levies on foreign washing machines didn’t yield more expensive appliances until April that year. Still, a Federal Reserve study this month found that duties Trump imposed in 2018 and 2019 meant higher prices as soon as two months later, suggesting consumers could start paying more in June.
Consumers are less willing to accept higher prices
Things have changed from the first time Trump was in the White House, when companies essentially passed along the entire cost of his tariffs. Now American consumers, still scarred by the burst of inflation that followed the COVID-19 pandemic, may be more reluctant to accept higher prices.
FILE – People shop at a party supply store in the Toy District of Los Angeles on April 9, 2025, where the majority of items are imported from China. (AP Photo/Jae C. Hong, File)
“Consumers weren’t inflation exhausted in 2018 the way that they are now,’’ Tedeschi said. Surveys by Federal Reserve banks in Atlanta and Dallas have found that most companies would eat at least some of the tariff costs this time around. And one reason that the Labor Department’s producer price index fell in April was that retailers and wholesalers reported lower profit margins, a sign that they may have been absorbing some of the tariff cost.
Trump, who has long insisted that foreign countries and not U.S. companies or consumers pay his tariffs, on Saturday lashed out at Walmart for saying it would raise prices. On social media, he demanded that the giant retailer “ EAT THE TARIFFS, and do not charge valued customers anything. I’ll be watching, and so will your customers!!!’’
The economic damage doesn’t just come from the cost of tariffs, but from the erratic way the president imposes them. For instance, the 145% China tariffs were just suspended for 90 days. Likewise, Trump has paused high taxes he slapped last month on imports from countries with which the United States runs trade deficits. Could those levies come back?
Consumers are clearly fearful that the duties will boost prices, as consumer confidence surveys have plummeted since Trump began ramping up his tariff threats in February. The Conference Board’s consumer confidence index has fallen for five straight months to its lowest level since the depths of the pandemic in May 2020.
Costlier coffee and Christmas wreathes are coming
Snowy Owl Coffee Roasters in Sandwich, Massachusetts, which imports beans from Brazil, Nicaragua, Burundi and other countries, is only now planning to raise its prices this week to cover the cost of the 10% tariffs. It plans to add 25 cents to 35 cents to the price for each cup.
“Tariffs are increasing costs and they’re adding to a lot of uncertainty around the potential for a downturn,” said Shayna Ferullo, 44, co-owner of Snowy Owl. “We are looking closely at the year ahead with the goal of consolidating and operating really, really tightly.”
Ferullo will also have to pay much more than she budgeted to renovate her shop in Brewster, Massachusetts — one of her three retail locations — because the contractor has raised his estimate, partly due to tariffs on building supplies. She has already elected to not fill one job after an employee left and is looking at ways automation could help reduce her labor costs, though she hasn’t laid off any of her 35 employees.
Jared Hendricks, CEO of Village Lighting Co., last month halted shipments of supplies he gets from China – holiday storage bags, wreathes, holiday lights and garlands. Now that the U.S. and China have reached a truce, he’s trying to get the products to the United States in time for the holidays.
He estimates that it will take 10 to 20 days from China to the West Coast ports via ship and another 20 days to 40 days for the goods to go through U.S. Customs, then travel via Union Pacific Railways to his company in Utah. Given all the expected delays, Hendricks said he’s worried that his holiday décor won’t arrive by Sept. 1 when it should start appearing in stores.
Meanwhile, he’s figuring out how to foot a $1 million bill for the tariffs. He’s hoping he can cover the cost by raising prices 10% to 15%.
In the meantime, he’s trying to secure a loan against his house to pay for the levies.
“We are moving forward,’’ he said, “but at great cost, personal risk, and weariness.”
