The number of Americans planning a vacation in the next six months is at the lowest in 15 year

Americans Cutting Back on Travel Amid Economic Uncertainty

At a time when vacations may be more needed than ever, Americans are planning fewer trips, with travel intentions hitting their lowest level in 15 years—excluding the COVID-19 pandemic, which largely shut down travel.

According to research nonprofit the Conference Board, the number of Americans planning a vacation within the next six months dropped sharply in February. Apollo Chief Economist Torsten Slok attributed the decline to policy and economic uncertainty, warning of broader risks to consumer spending.

“The biggest downside risk is that policy uncertainty could create a sudden stop in the economy, where consumers stop buying cars, stop going to restaurants, stop going on vacation, and companies stop hiring and stop making capital expenditures,” Slok wrote in a research note Wednesday.

Tariffs, DOGE, and Market Anxiety

Much of the current policy uncertainty stems from President Donald Trump’s tariffs and Elon Musk’s Department of Government Efficiency (DOGE), a non-cabinet agency focused on cost-cutting.

“There are adjustment costs associated with changing trade policy and changing the size of the government sector, and the immediate question for markets is how big the short-term pain will be,” Slok explained.

Trump, who calls himself a “tariff man”, recently implemented 25% tariffs on Mexico and Canada, along with additional levies on China. Each country has retaliated, fueling fears of an escalating global trade war. The stock market tumbled on the news, as Wall Street worried about higher consumer prices, slowing economic growth, and an increased risk of recession.

Slok pointed out that the long-term impact on markets and the broader economy will depend on how long the tariffs remain in place. Commerce Secretary Howard Lutnick has hinted at a potential deal, but Trump alone controls the tariff agenda.

Consumer and Corporate Confidence Wanes

Regardless of whether a trade deal materializes, consumer and corporate sentiment have already taken a hit, Slok said.

  • Consumers expect fewer jobs ahead and are cutting back on spending.
  • Companies are pulling back on investments and delaying costly projects.
  • If uncertainty lingers, layoffs—especially from DOGE-driven cost cuts—could push unemployment higher.
“If policy uncertainty persists, consumers and firms may begin to hold back spending decisions,” Slok warned.

The Fed’s Role in the Turbulence

The Federal Reserve, tasked with maintaining stable prices and maximum employment, is now caught between two conflicting pressures.

“From a Fed perspective, the biggest problem is that tariffs increase prices and hence inflation,” Slok explained.
“That is why a trade war, by definition, is a stagflation shock: Higher prices and lower sales.”

If tariffs on Canada and Mexico persist, Slok believes the Fed will shift its focus to rising unemployment and start cutting interest rates in response.

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