Forbes media’s Steve Forbes joins the ‘The Big Money Show’ panel to talk on the international implications of growing trade tension between the US and China.
US economy contracted in the first quarter as president Donald Trump’s According to the new data released on Wednesday, the economic agenda came into effect.
Bureau of Economic Analysis (BEA) of Commerce Department released its advance estimate for the first quarter GDP (GDP), which found American economy contracted At an annual rate of 0.3% in the first quarter, which runs from January to March.
Economists surveyed by LSEG expected that the economy would grow at a rate of 0.3% in the quarter. 0.3% contraction of the first quarter was slow 2.4% GDP growth Recorded in the fourth quarter. The quarterly contraction was the first after the first quarter of 2022.
The decline in GDP was mainly attributed to an increase in imports, which is counted as a subtraction in the calculation of GDP, as well as a decrease in government spending. Those changes were partially offset by increase in investment, consumer expenses and exports.
It was powered by an increase of 41% in imports consumer goodsMainly drug accessories, medicines and vitamins; And by capital items such as computers and parts.
Increase in imports was operated by importers predetermined by predetermined products. Trump’s tariff,
Consumer spending increased by 1.8%for both services (+2.4%) and goods (+0.5%), as the expenditure on services was widespread and led by healthcare, housing and utilities. Within spending on goods, a decrease of 3.4% in durable goods partially increased the goods 2.7%.
Private sector added 62,000 jobs in April, below expectations, ADP says
The imports increased in the first quarter as importers saw the front-run tariff costs before the implementation of the tariff and created the inventory. (QIAN Weizhong / VCG Getty Image / Getty Image)
Trade investment The first quarter increased by 21.9% in the first quarter after a decline of 5.6% in the fourth quarter. Non -residential investment increased by 9.8% in this quarter, causing an increase of 22.5% in equipment spending.
Disposable personal income in the first quarter was 2.7%, which was 1.9% in the fourth quarter.
Personal savings The percentage of personal income in the first quarter was 4%, above 3.7% in the fourth quarter – although it is below 5.4% in the first quarter of 2024.
Consumer confidence reached a 5 -year low in April
Government expenditure The first quarter was 1.4% below, due to a decline of 5.1% in federal government expenditure. Federal expenses on national defense activities were 8%below, while nondenth expenses fell by just 1%. The state and local government’s expenses increased by 0.8%, the fastest growth since the second quarter of 2022.
Ryan Sweet, the chief American economist of Oxford Economics, wrote that “GDP is going to look backward, but there were some good news as real final sales for private domestic buyers, the engine of the economy posted a decent benefit.”
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He said, “This test will be done because the economy is now being hit with several shocks, including tariffs, supply-chain stress, strict financial market status and uncertainty, but daily data means that the engine of the economy was not a stall in this quarter,” he said.
“The Q1 data on GDP highlights the bond that is in the Federal Reserve. The economy was essentially stable in the first three months of the year, while the headline and core inflation had increased, an increase in an increase in stagflation,” Sweet said that the firm still cuts just one interest rate at the end of the year.
