Charting the global economy: US GDP falls on larger trade hit
The US economy contracted slightly to start the year, largely reflecting a bigger tariff-related trade hit but also a larger downshift in household spending growth than first estimated.
In contrast, an export surge help drive the Canadian economy in the first quarter as businesses accelerated shipments ahead of higher US duties. Gross domestic product in India rose at a stronger-than-forecast 7.4% pace.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the
global economy
, markets and geopolitics:
US & Canada
Bloomberg
The US economy shrank at the start of the year, restrained by weaker consumer spending and an even bigger impact from trade than initially reported. The economy's primary growth engine — consumer spending — advanced 1.2%, down from an initial estimate of 1.8% and the weakest pace in almost two years. Meantime, net exports subtracted nearly 5 percentage points from the GDP calculation, slightly more than the first projection and the largest on record.
Bloomberg
A strong jump in tariff-driven exports fueled Canada's growth at the start of this year, offsetting domestic weakness in other parts of the economy. Preliminary data also suggests some continued momentum at the start of the second quarter, with output rising 0.1% in April, led by mining, oil and gas, and finance industries.
Bloomberg
Consumer sentiment rebounded in late May from one of the lowest readings on record earlier in the month and long-term inflation expectations retreated as concerns about the economy eased after the rollback of China tariffs.
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Bloomberg
In the wake of Nvidia Corp.'s latest earnings report and upbeat sales forecast, the US government's GDP report also underscored the locomotive power of the artificial intelligence boom. Business investment in computers and other information processing equipment contributed a record 1.01 percentage points to first-quarter GDP.
Europe
Bloomberg
European firms in China are the most pessimistic about growth prospects since 2011, underscoring the challenges of doing business in the world's second-largest economy despite recent government efforts to address some complaints. Some 29% of respondents were downbeat on the outlook for their sector over the next two years, according to an annual report by the European Union Chamber of Commerce in China.
Bloomberg
Germany's inflation rate dropped to 2.1% in May, slowing less than expected and highlighting lingering risks as the European Central Bank prepares to cut rates again. The data follow reports from Italy and Spain, where inflation eased to just below 2%, supporting the case for borrowing costs to be lowered further. Meanwhile, France said consumer price rose just 0.6% from the previous year.
Bloomberg
Europe is gradually adding gas to its depleted storage sites despite seasonal works at production facilities across the globe. In addition, overall demand for liquefied natural gas in Asia remains weak, which is a relief for European buyers that compete for the same fuel.
Asia
Bloomberg
For decades, Asia's export powerhouses had a simple financial strategy: Sell goods to the US, then invest the proceeds in American assets. That model is now facing its biggest threat since the 2008 global financial crisis as Donald Trump tries to remake global trade and the US economy — upending the logic behind $7.5 trillion of investments from Asia. Some of the world's biggest money managers say an unwind is just getting started.
Bloomberg
India's economy grew at a faster pace than analysts expected, driven by some pick up agricultural activity and investments. While India retains its title as the world's fastest-growing major economy, the annual growth rate marks a notable slowdown from the 8% average seen in recent years — the pace needed by Prime Minister Narendra Modi to achieve his ambitious goal of making the country a developed nation by 2047.
Emerging Markets
Bloomberg
Brazil's consumer prices rose less than forecast in early May, fueling bets that the central bank will halt its cycle of interest rate hikes while keeping its monetary policy restrictive going forward to tame inflation.
World
Bloomberg
Japan lost its position as the world's largest creditor nation for the first time in 34 years, giving up the title to Germany despite posting a record amount of overseas assets. Japan's status as the world's biggest net-creditor nation was a consequence of decades of current account surpluses that saw Japanese investors and companies load up on holdings abroad.
Bloomberg
New Zealand lowered rates for sixth straight meeting. South Africa, the Bank of Korea, Mozambique and Eswatini also cut. Hungary, Israel, Uruguay, Guatemala and Tunisia kept borrowing costs unchanged.
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Time of India
23 minutes ago
- Time of India
The world's auto supply chain is in the hands of a few Chinese bureaucrats
In a hulking grey building just east of Tiananmen square in Beijing, a small team in China's Ministry of Commerce is deciding the fate of the global auto industry , one rare earth magnet export permit at a time. China holds a near-monopoly on rare earth magnets - a crucial component in electric vehicle motors - and it added them to an export control list in April as part of its trade war with the United States, forcing all exporters to apply to Beijing for licenses. It falls to the Bureau of Industrial Security and Import and Export Control - which is part of China's Ministry of Commerce - to review export permits for the rare earth magnets, which are vital for car motors, wind turbines and even U.S. F-35 fighter jets. While dozens of licences have been issued since late April, executives, lobbyists and diplomats say they are only a small fraction of the applications that have flooded in from automakers, semiconductor companies and aerospace firms around the world since the tougher export controls were introduced. Washington says delays in issuing export licences show China is reneging on commitments made during trade talks in Geneva last month and it has retaliated with export curbs on plane engine parts and other equipment. U.S. President Donald Trump and Chinese President Xi Jinping held talks by phone on Thursday as the escalating dispute over China's rare earth stranglehold threatened to derail the fragile trade truce agreed between the two superpowers. When the new rare earth magnet measures came in, the export control bureau had a total of just 30 staff, though this has since been doubled to around 60, according to two sources who were briefed on a meeting between the ministry and Chinese and European semiconductor firms last week. "We appreciate that MOFCOM has increased its resources to address demand and they're working hard and long hours on these issues," said Adam Dunnett, Secretary General of the European Chamber of Commerce in China, referring to the ministry. "But the reality is this is having a huge impact on a wide variety of sectors. It's something that could have been better planned and rolled out," he said. According to personnel records posted to the Ministry of Commerce's website in June 2024, there are only three senior officials within the bureau who can approve the export permits. The ministry's website lists the export licence bureau's office hours as: Weekdays, 8:30-11:30 a.m., 14:00-17:00 p.m. Reuters was unable to determine current staffing levels or whether more officials are now able to approve applications. The Ministry of Commerce did not respond to questions from Reuters on this subject. Chokepoint The global alarm over shortages underscores the enormous leverage China has acquired through its near-monopoly on rare earth production. It also reveals a complex bureaucratic process that has gone from checkpoint to chokepoint. "The process for our suppliers to apply for export licences for various rare earths ... since April, is complex and time-consuming, partly due to the need to collect and provide a lot of information," a spokesperson for Bosch, the German engineering and technology multinational, said last month. A Chinese-language guide to the process published by the Ministry in late March runs to almost 14,000 Mandarin characters. European auto suppliers alone have filed hundreds of requests since early April, with only about a quarter granted. These applications can range from dozens to hundreds of pages, according to sources who have either filed requests or been briefed about them. Public Ministry of Commerce guidelines require information including technical product descriptions, signed contracts. Descriptions of production facilities and photos of products are also encouraged. China's stated aim is to ensure dual-use items don't end up in military equipment, but officials are often overly cautious even though many applications clearly state commercial use, Dunnett said. "Another concern we have heard from some companies is that they are being asked for sensitive and excessive information that is part of their intellectual property which has led to delays in their applications," Dunnett added. While applications are meant to be processed in 45 working days, the ministry says applications related to national security will take longer, without defining how long. Strategic excuse Cory Combs, head of critical mineral and supply chain research at Trivium China, a policy research group, said it was not clear whether the delays were due to bureaucratic inertia or intentional weaponisation. "We do expect these applications to U.S. end-users to be reviewed on par with other countries and approved whenever they're not for military use," he said. "The issue here is that, is it quick enough for the Trump administration to believe that Beijing has not reneged on the Geneva agreement?" Some U.S. industry figures believe that the bureaucratic backlog is a "strategic excuse". "China can staff up as fast as they want, if they wanted to," said a source from the U.S. rare earths industry who declined to be named for sensitivity reasons. In public, Chinese officials have said the export controls apply to all countries, the implication being that they do not count as a U.S.-specific countermeasure under the Geneva agreement. Foreign ministry spokesperson Lin Jian said on May 30 that the rare earth export controls are "non-discriminatory and not targeted at any specific country". During the Geneva talks, however, China privately admitted that the rare earth export controls qualified as non-tariff countermeasures, according to a source briefed on the talks. Rare earths remain a core part of ongoing U.S.-China discussions, the person said. China's foreign ministry did not immediately respond to a request for clarification. Chinese scholars openly admit that the rare earth export controls are retaliation for U.S. chip curbs. "It's a short-term form of leverage which doesn't hurt China, as the rare earths in question have relatively low monetary value," said Zhu Junwei, an international relations scholar at the Grandview Institution, a Chinese think-tank.
Time of India
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- Time of India
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32 minutes ago
- Economic Times
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(You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , Founder & CMD,, says Elon Musk 's recent call for Trump's impeachment, despite past support, signals escalating tensions. Concerns arise about Musk's government involvement and data access. The EV industry faces chip supply risks, particularly China's dominance in strategic resources globally. Due to volatility and news dependence, Tesla is considered a high-risk stock and is not held in global funds.I just posted on that and yes, this was a plot twist that was very predictable. So, any couple's counsellor would have told them that this was not going to last. Even if in today's America they have gone to their church pastor also, they would have been told that. So what has happened is very predictable. Two people like them were not going to make it. Till two days ago, Elon Musk found only good things about Trump and now he is calling for impeachment and saying such ingratitude after all the money I spent on your campaign, you have forgotten about it! So, yes, it is going to get Elon Musk was not born in the US. He is an immigrant and he still holds on to his South African citizenship and a Canadian citizenship as well. There are many things that could happen. Let us see how it pans out. But I do not think this is bad news as such for markets because I do not think whatever Musk was doing within the government was something which was very desirable. It was just getting access to a lot of government data and also slashing a lot of things without understanding what they were really doing. So, I do not think that him leaving the government is a negative thing for the us see how it goes. That is a risk area for a lot of the EVs in the world for a number of things. We saw in India recently that the only supplier effectively is China or China controlled entities because China has very strategically controlled a lot of areas and not just in Asia and Africa. I read in some books that they have been there right from South America to the Arctic wherever they think there is strategic raw material or other strategic goods, they have been there. It is a risk area for the EV industry. Tesla as such, we have not held in our global funds for a while now because it is too volatile and too unpredictable a stock, and too dependent on news. We have steered clear off it as it is a high-risk stock in our category.
