New York, N.Y. — Apollo Global Management has issued a stark warning about an impending recession in the United States, primarily fueled by recent tariffs that will likely result in widespread job losses within the trucking and retail sectors. The financial firm emphasizes that increasing economic uncertainty is prompting businesses to prepare for significant operational challenges.
The trucking industry, which plays a crucial role in national logistics, is poised to face substantial difficulties as tariffs disrupt trade, notably with China. As a result, Apollo anticipates a marked decrease in container ship traffic from China, which will lead to a reduction in freight volumes and, consequently, a drop in demand for trucking services. Approximately 20% of U.S. trucking volumes stem from imports, signaling that a decline in incoming goods could have dire consequences for the sector.
According to the firm’s analysis, domestic freight activity could decline sharply by mid-May, putting immense pressure on trucking companies already grappling with what has been termed the Great Freight Recession. This prolonged downturn may compel carriers to cut labor costs through layoffs as they adjust to the reduced demand for their services.
The retail sector is also bracing for significant layoffs, as supply chain disruptions caused by tariffs are expected to lead to inventory shortages—particularly for products sourced from China. Retailers may struggle to replenish stock due to longer lead times, ultimately complicating inventory management. These challenges may require retailers to seek alternative suppliers or limit their product offerings, both of which could further exacerbate the situation.
Consumer confidence is waning, driven by economic apprehensions and rising prices attributed to tariffs. Low consumer confidence scores have deterred spending, especially on non-essential items, resulting in decreased foot traffic and sales across retail stores. Companies, including Chipotle and Southwest Airlines, have noted changes in consumer behavior, with many individuals opting to save rather than spend amid economic uncertainty.
Apollo forecasts that job cuts in the retail industry may become evident by June, as businesses continue to face declining demand coupled with elevated operational costs. The overall economic landscape is troubling, with corporate spending and new orders declining even before the tariffs were implemented. Many firms are now revising their earnings projections downward and scaling back on investments, increasing the likelihood of layoffs in various sectors.
Further complicating matters, Apollo warns that the tariff-induced economic slowdown may give rise to stagflation—a condition marked by stagnant economic growth coupled with high inflation. Unlike standard recessions, where a drop in demand typically leads to lower inflation rates, the current situation could see trade disruptions pushing costs higher. Federal Reserve surveys indicate that rising prices across supply chains are further squeezing consumer purchasing power.
With both consumer and business confidence on the decline, many firms are tightening their belts in anticipation of weaker demand. This reduction in capital expenditures reflects not only immediate financial pressures but also a shift toward adapting to a trade-restricted economy. According to Apollo, the dual challenge of rising costs and sluggish growth could place considerable strain on businesses and consumers alike.
As the threat of stagflation looms, policymakers face a difficult balancing act. Traditional monetary tools may prove inadequate for tackling inflation while also fostering economic growth. Strategic interventions will likely be necessary to alleviate the hardships facing vulnerable sectors of the economy.
Apollo’s projections paint a bleak future for the U.S. trucking and retail industries, highlighting an urgent need for businesses to prepare strategically for the challenges ahead. The firm’s analysis serves as a cautionary tale, underscoring the necessity for proactive measures to navigate the forthcoming economic turbulence, which could reshape these critical sectors in profound ways.