BREAKING NEWS The ominous warning of poor economic health as Trump's tariffs loom

Daily Mail​

5 hours ago

America's economy produced less than expected to start the year.
The US economy shrank at a 0.5 percent annual pace from January through March, the Commerce Department reported Thursday.
It was an unexpected downgrade from its previous estimate of 0.2 percent.
First-quarter growth sank under a surge of imports as companies in the United States rushed to bring in foreign goods before Trump could impose tariffs on them.
It's 'another challenge for a day where there's a lot of moving parts,' Bret Kenwell, a US investment analyst at eToro, told DailyMail.com.
'A bumpy import/export number was expected, but the bigger concern is consumer spending.'
The January-March drop in gross domestic product — the nation's output of goods and services — reversed a 2.4 percent increase in the last three months of 2024 and marked the first time in three years that the economy contracted.
Imports expanded 37.9 percent, fastest since 2020, and pushed GDP down by nearly 4.7 percentage points.
Consumer spending also slowed sharply, expanding just 0.5 percent, down from a robust 4 percent in fourth-quarter 2024 and sharp downgrade from the Commerce Department's previous estimate.
A category within the GDP data that measures the economy´s underlying strength rose at a 1.9 percent annual rate from January through March, down from 2.9 percent in the fourth quarter of 2024.
This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.
And federal government spending fell at a 4.6 percent annual pace, the biggest drop since 2022.
Trade deficits reduce GDP. But that´s just a matter of mathematics. GDP is supposed to count only what´s produced domestically, not stuff that comes in from abroad. So imports - which show up in the GDP report as consumer spending or business investment - have to be subtracted out to keep them from artificially inflating domestic production.
The first-quarter import influx likely won´t be repeated in the April-June quarter and therefore shouldn´t weigh on GDP. In fact, economists expect second-quarter growth to bounce back to 3% in the second quarter, according to a survey of forecasters by the data firm FactSet.
The first look at April-June GDP growth is due July 30.