Tariff uncertainty weighs on economy; UPS plans job cuts; KFC parent eyes Saucy restaurant expansion

The nation’s gross domestic product declined in the first quarter and private-sector hiring slowed in April, as analysts cited factors led by uncertainty over trade tariffs and their potential effects on inflation.

The Commerce Department Wednesday reported that GDP declined 0.3% in the first quarter on an annual basis, after 11 straight quarters of positive growth, including a 2.4% annual rise in the final quarter of 2024. Economic volatility sparked by newly imposed tariffs has spurred some analysts to warn of rising recession risks, though a recession is technically defined as two consecutive quarters of falling GDP.

Ryan Sweet, chief U.S. economist at Oxford Economics, said first-quarter GDP fell less than the forecasting firm expected, but imports dragged on the economy as consumers and businesses purchased items ahead of tariffs taking effect. Recession risks remain high for 2025, as business uncertainty could bring “paralysis in business investment,” reduced hiring and increasing layoffs, Sweet said in a statement.

Private U.S. payrolls grew by a slower than expected 62,000 in April, led by categories such as transportation and construction, according to the latest tracking by payroll services provider ADP and Stanford University’s Digital Economy Lab. The report is considered a preview of Labor Department reporting on public and private employment, with April numbers including the unemployment rate slated for release May 2.

ADP Chief Economist Nela Richardson said employers are trying to reconcile shifting government policy and consumer uncertainty with other more positive economic data, showing overall hiring and consumer spending holding steady by historical standards so far in 2025. “It can be difficult to make hiring decisions in such an environment,” Richardson said in a statement Wednesday. 

Package shipping giant UPS is planning to cut 20,00 jobs this year as part of cost-reduction efforts, citing factors including its decision to deliver fewer packages for Amazon, its biggest customer based on package volume.

Executives of Atlanta-based UPS said job cuts are part of larger plans to reduce annual costs by $3.5 billion this year, including previously announced moves that include closing at least 73 facilities nationwide. UPS announced in January that it reached an agreement with Amazon to reduce delivery volume by more than 50%, starting in the second half of 2026.

“These actions will enable us to expand our U.S. domestic operating margin and increase profitability,” UPS Chief Financial Officer Brian Dykes said during a quarterly earnings call this week.

The latest announced layoffs amount to around 4% of the global workforce of UPS, which operates in more than 200 countries. UPS last year said it planned to cut 12,000 jobs. 

Yum Brands said it is looking to expand a new tenders-focused concept called Saucy by KFC, after getting early positive results from a test restaurant in Orlando, Florida. The move comes as the company combats sagging sales at its KFC and Pizza Hut chains, though its Taco Bell remains a bright spot with sales on the rise despite a challenging economy.

During a quarterly earnings call Wednesday, company executives said sales at the Saucy test restaurant more than doubled the U.S. system average for its traditional KFC locations. CEO David Gibbs said Yum plans a "phased expansion" to 20 Saucy locations, with new stores in “geographic proximity” to the current one, as it seeks to fend off competition from fast-growing chicken rivals like Raising Cane’s and Popeyes.

Louisville, Kentucky-based Yum Brands and its franchisees operate nearly 61,000 restaurants across more than 150 countries. The company said it opened more than 750 restaurants globally during the first quarter.

Company leaders said Taco Bell posted same-store annual sales growth of 9% and total sales growth of 11%; as KFC declined 1% for same-store sales and dropped 2% for total sales. Pizza Hut, a laggard for the past several quarters, declined 5% for same-store sales and decreased 7% for total sales.