The United States economy contracted in the first quarter, weighed by a flood of goods imported by eager companies to avoid higher costswhich underlines the disturbing character of the often chaotic tariff political of President Donald Trump.
The gross domestic product decreased at an annualized rate of 0.3% last quarter, On Wednesday the Office of Economic Analysis of the Department of Commerce said in its early estimate of the GDP of the first quarter.
The economists surveyed by Reuters had planned that GDP would increase at a rate of 0.3% in the January-March period. However, the survey concluded before Tuesday’s data showed that the trade deficit of goods shot at a historical maximum in March in record imports, which led most economists to strongly reduce their GDP estimates.
The economy grew at a rate of 2.4% in the fourth quarter.
But it is likely that the report has exaggerated the weakening of the economy’s perspectives, since consumer expense continued to grow, although at a moderate pace.
The data stressed the growing disapproval of the Americans of the economic management of President Donald Trump so far, when the first 100 days of his second term are completed. Trump devastated last November thanks to the anguish of voters for the economy, especially for inflation.
Consumer confidence is at a minimum of five years and business confidence has sunk. Airlines have withdrawn their financial forecasts by 2025, citing uncertainty about spending on non -essential trips due to tariffs, which economists have warned that costs will increase for companies and homes.
Since an unusually large non -monetary amount had explained part of the jump of imports, Some economists warned that there was not necessary to give too much importance to GDP figure. Others argued that the data did not change the narrative of an economy in difficulties due to the uncertainty due to tariffs.
Inflation rebounded last quarter and is expected to continue going up throughout the year. Economists expect the Federal Reserve to again cut interest rates at some point in this year.
Trump softened on Tuesday the impact of his tariffs on the automotive sector through an executive order that mixes credits with relief from other encumbrances on pieces and materials.
The 145% tariff on Chinese products, which unleashed a commercial war between Washington and Beijing, remains in force, Like a series of other import rights. Trump sees tariffs as a tool to raise income with which to compensate for his fiance fiscal cuts and reactivate an American industrial base in decline for a long time.
