Close Menu
  • Home
  • AI & Technology
  • Politics
  • Business
  • Cryptocurrency
  • Sports
  • Finance
  • Fitness
  • Gadgets
  • World
  • Marketing

Subscribe to Updates

Subscribe to our newsletter and never miss our latest news

Subscribe my Newsletter for New Posts & tips Let's stay updated!

What's Hot

‘World’s Oldest Baby’ Born from 30-Year-Old Frozen Embryo

August 2, 2025

Exchanges Receive 21,400 Bitcoin At A Loss From Short-Term Holders

August 2, 2025

Spot Ethereum ETFs Set A New Record In July With $5.4 Billion Monthly Inflow

August 2, 2025
Facebook X (Twitter) Instagram
  • Home
  • About US
  • Advertise
  • Contact US
  • DMCA
  • Privacy Policy
  • Terms & Conditions
Facebook X (Twitter) Instagram
MNK NewsMNK News
  • Home
  • AI & Technology
  • Politics
  • Business
  • Cryptocurrency
  • Sports
  • Finance
  • Fitness
  • Gadgets
  • World
  • Marketing
MNK NewsMNK News
Home » Negative GDP data is the latest to offer 2 views on the US economy: Morning Brief
Finance

Negative GDP data is the latest to offer 2 views on the US economy: Morning Brief

MNK NewsBy MNK NewsMay 1, 2025Updated:May 2, 2025No Comments4 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest Email


This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:

If you strip out all the bad stuff from the first quarter GDP figures released Wednesday, the numbers are actually solid.

At least, that’s how some economists and commentators taking a closer look at the estimate of first quarter US gross domestic product saw things.

On the surface, captured in arresting headlines from US news outlets across the country, the economy contracted, registering the first GDP pullback in three years. More optimistic observers digging beneath the top layer of findings see reasons for hope.

The question we don’t know the answer to is which version will be “right” going forward.

“GDP is backward-looking but there was some good news as real final sales to private domestic purchasers, the engine of the economy, posted a decent gain,” Oxford Economics’ chief US economist Ryan Sweet wrote in a note to clients Wednesday.

Wednesday’s 0.3% annualized decline in GDP was driven by a surge in imports, as companies front-loaded orders to lock in lower prices ahead of the anticipated tariffs from the Trump administration. Imports, which increased at an annualized rate of 41.3% in the first quarter, are a subtraction to growth in the calculation of GDP and pulled the figure down by 5 percentage points for the quarter.

And just as corporate earnings and sentiment surveys have offered two different perspectives of the American consumer — simultaneously cautious and resilient — so too does the latest GDP data tell two stories about tariffs.

One says the domestic economy is functioning mostly fine and can withstand this disruption; another reading suggests that a chunk of America’s economic engine spent the last quarter in a consumption-fueled panic to get ahead of the levies.

The White House advisers noted how the quirky arithmetic, if interpreted differently, could tell a positive story.

“That’s the best negative print I have ever seen in my life. And the markets need to look beneath the surface of that,” said Peter Navarro, senior counselor to the president for trade and manufacturing, in an interview with CNBC Wednesday. “When you strip out inventories and the negative effects of the surge in imports because of the tariffs, you had 3% growth,” he said. “So we really like where we’re at now.”

All three major indexes sank following the release of the GDP data, which was accompanied by a reading of higher inflation. Soft labor market data released just minutes before the GDP numbers also added to investor concern. The president himself weighed in on the reaction, pinning recent weakness on his predecessor.

But by the end of the trading day on Wednesday, all seemed well in markets — only the Nasdaq finished in red figures, dropping less than 0.1%.

White House trade counselor Peter Navarro speaks with reporters at the White House, Wednesday, April 30, 2025, in Washington. (AP Photo/Evan Vucci)
White House trade counselor Peter Navarro speaks with reporters at the White House, Wednesday, April 30, 2025, in Washington. (AP Photo/Evan Vucci) · ASSOCIATED PRESS

Analysts have cautioned that the recent swings in trade and consumer spending could mean a drop-off in demand in the months ahead, especially if prices continue to climb.

The stutter-step rollout and walkbacks of tariff policy have also created an air of uncertainty that may weigh on employment. And the Fed, caught between shrinking GDP and pricing pressures, is hard-pressed to intervene.

If more bullish views hold, the latest numbers are skewed by a distortion set to correct. But more critical takes advise we are only just beginning to see the consequences of a high-tariff regime, that this isn’t a blip, but a warning.

“While a superficial reading might attribute this downturn to the newly imposed tariffs, the contraction was largely a function of economic activity being pulled forward as importers, businesses and consumers rushed to get ahead of the tariff implementation,” wrote Greg Daco, chief economist at EY, in a note on Wednesday.

“This artificial front-loading of demand sets the stage for a sharper demand cliff in Q2 — a far more troubling phase of the ongoing economic slowdown.”

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.

morning brief image
morning brief image

Click here for the latest economic news and indicators to help inform your investing decisions

Read the latest financial and business news from Yahoo Finance





Source link

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
MNK News
  • Website

Related Posts

Rite Aid files for bankruptcy — again

May 6, 2025

How to Track Driver Performance Without Micromanaging

May 6, 2025

Ford says its Q1 profit fell by two-thirds and it expects a $1.5 billion hit from tariffs this year

May 6, 2025
Add A Comment
Leave A Reply Cancel Reply

Editors Picks

SA want promising T20 batters to show potential – Sport

August 2, 2025

Gauff fights back to advance in Canada, Medvedev crashes out – Sport

August 2, 2025

Santner-inspired New Zealand beat Zimbabwe in first Test – Sport

August 2, 2025

Pakistan, Afghanistan, UAE to play T20I tri-series in Sharjah – Sport

August 1, 2025
Our Picks

Exchanges Receive 21,400 Bitcoin At A Loss From Short-Term Holders

August 2, 2025

Spot Ethereum ETFs Set A New Record In July With $5.4 Billion Monthly Inflow

August 2, 2025

Ethereum New Addresses Surge To Nearly 257K In A Day, Matching 2017 And 2021 Bull Markets

August 2, 2025

Recent Posts

  • ‘World’s Oldest Baby’ Born from 30-Year-Old Frozen Embryo
  • Exchanges Receive 21,400 Bitcoin At A Loss From Short-Term Holders
  • Spot Ethereum ETFs Set A New Record In July With $5.4 Billion Monthly Inflow
  • YouTube is testing Instagram-style collabs
  • AI Can’t Keep a Secret: Sensitive Conversations with ChatGPT Show Up on Google Searches

Recent Comments

No comments to show.
MNK News
Facebook X (Twitter) Instagram Pinterest Vimeo YouTube
  • Home
  • About US
  • Advertise
  • Contact US
  • DMCA
  • Privacy Policy
  • Terms & Conditions
© 2025 mnknews. Designed by mnknews.

Type above and press Enter to search. Press Esc to cancel.