President Trump is entering a critical week for the economy amid growing fears that his penchant for tariffs could stall growth and undercut progress on inflation.

Trump has described Wednesday as “Liberation Day,” when his administration will impose sweeping reciprocal tariffs on other nations with duties on U.S. goods. The March jobs report will also be released on Friday, providing additional data about the strength of the labor market, particularly in the wake of thousands of federal government employees fired by the administration.

Experts described the economy as at something of a crossroads. Data about the labor market and wages have been generally positive, economists said. But the closely watched University of Michigan Survey of Consumers issued a report Friday that found consumer sentiment dropped to its lowest point since November 2022 amid fears of rising prices that could be worsened by tariffs.

A recession is not inevitable, economists said. But the direction of the economy will depend largely on how Trump and his team proceed in the weeks ahead.

“The big question is do the sentiment data converge to the hard data, or do the hard data converge to the sentiment data?” said Michael Strain, director of economic policy studies at the American Enterprise Institute (AEI). “Because that divergence can’t persist for very long. In my judgment, the sentiment data is entirely driven by policy choices from the administration. Therefore it’s kind of up to the White House which of those two things happen.”

Trump has spoken glowingly about the state of the economy, blaming any residual inflation on what he inherited from President Biden. Administration officials have noted the price of eggs has come down in........

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