Meanwhile, consumer sentiment has recently dropped (-10%), hinting that underlying spending might be shakier than headline numbers infer. Add in a possible inflationary drag from tariffs and it’s not hard to imagine consumers cutting back on big-ticket items. In response, businesses may scale back hiring or even lay off workers. If growth fizzles while inflation clings on, it’s like knocking over the first domino: weaker demand leads firms to cut back, layoffs spread, unemployment rises and before you know it, the economy is teetering into stagflation.