Apollo’s chief economist Torsten Slok explained in detail the risks on the American economy on Baron’s roundateable.
The US economy contracted in the first quarter as the tariffs increased the shipment before the importers were effective.
Economic Analysis Bureau (BEA) of Commerce Department released its third estimate for the first quarter Gross domestic product (GDP), in which the US economy was found to be contracted at an annual rate of 0.5% in the first quarter, which runs from January to March.
The economists surveyed by LSEG expected that the economy would be contracted at the rate of 0.2% in the quarter to suit the second initial reading. The fourth quarter contains contraction after the growth of 2.4% GDP growth.
0.5% GDP contraction The final first-wise GDP figures showed the first quarterly contraction after the first quarter of 2022.
Limbo job seekers in the form of long -term unemployment
The decline in GDP was mainly attributed to one Increase in imports With a decrease in government spending. Those changes were partially offset by increase in investment and consumer spending.
Import increased by 37.9% in the first quarter and was responsible for contraction of 4.66% in GDP, as the firms increased imports in effort to reduce the impact of the President. Donald Trump’s Tariffs, which are taxes on imported goods. In GDP calculations, imports are reduced because metric is measured to measure domestic production.
Government expenditure The pre -quarter was 0.6% below, falling 4.6% in federal expenses, partially offset by state and local governments by 2% profit.
Inflation increased slightly on an annual basis in May
The first quarter of GDP 2025 contracted more than expected. ((Photo by Stephanie Reynolds / AFP through Getty Image) / Getty Images)
consumer spending The first quarter was 0.5% above, with goods spent up to 0.1% and services increased by 0.6% compared to the previous quarter.
After a contraction of 5.6% in the fourth quarter, private investment in the first quarter rose 23.8%.
Disposable personal income in the first quarter was 2.5%, which was unchanged from the fourth quarter. personal savings The percentage of disposable income was 4.3%, which was above 3.8% at the end of the previous year.
JP Morgan CEO Jamie Dimon said that the economic situation may soon deteriorate
IY chief economist Gregory Dako said, “Data confirms that Tariff Axis promoted the activity-loading at the beginning of the year-businesses raced to import goods before new duties, while consumers accelerated the purchase of some goods.”
Import in the first quarter rose by 37.9% and was responsible for contraction of 4.66% in GDP. (Photo by Ride / Getty Image / Getty Image)
“The time in the demand and supply of these wild swings had spread to the quarters so that Q1 and Q2 GDP print tariffs are more reflective of the fog, compared to the clear-cut reading on the economic flow,” said the dekin.
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Ryan Sweet, the chief American economist at Oxford Economics, said, “The decline in Q1 GDP was a touch more than before thinking, but the details are more disturbing due to the downward revision for the real final sales for domestic buyers engine.”
