Steve Forbes Media's “Big Money Show” panel will be presenting the international meaning of the growing trade tensions between the US and China.
The US economy signed in the first quarter as President Donald Trump's economic agenda came into effect, according to new data released Wednesday.
The Department of Commerce's Economic Analysis Bureau (BEA) has released a preliminary estimate of GDP for the first quarter.
Economists surveyed by LSEG expected the economy to grow at a rate of 0.3% in the quarter. The 0.3% contraction in the first quarter was slower than the 2.4% GDP growth recorded in the fourth quarter. The quarterly contraction was the first since the first quarter of 2022.
The decline in GDP is primarily due to an increase in imports, which counts as a subtraction in GDP calculations, and is a decrease in government expenditure. These shifts were partially offset by increased investments, consumer spending and exports.
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The 41% surge in imports was driven primarily by consumer goods, drugs and vitamins. Capital goods such as computers and parts.
The increase in imports was driven in part by importers pre-ordering products to beat the shipment to Trump's tariff implementation.
Consumer spending increased by 1.8% in profits for both services (+2.4%) and goods (+0.5%), as increased spending on services was widespread and led by healthcare, housing and utilities. Within the expenditure on goods, the 2.7% increase in undurable goods was partially offset by a 3.4% decrease in durable goods.
The private sector added 62,000 jobs in April.
Imports spiked in the first quarter as importers build frontline tariff costs and inventory before the implementation of customs duties. (Qian Weizhong/VCG via Getty Images)
After a 5.6% decline in the fourth quarter, business investments rose 21.9% in the first quarter. Non-resident investments were led to an increase of 9.8% in the quarter and a 22.5% increase in equipment spending.
Disposable personal income increased from 2.7% in the first quarter, up from 1.9% in the fourth quarter.
Personal savings as a percentage of personal income increased from 4% in the first quarter, up from 3.7% in the fourth quarter, but down from 5.4% in the first quarter of 2024.
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Government spending fell 1.4% in the first quarter, while federal spending fell 5.1%. Federal spending on national defense operations fell by 8%, while unevacuation spending fell by just 1%. State and local government spending has risen by 0.8%, with slower growth since the second quarter of 2022.
“While GDP is backwards, there was some good news as true final sales have made decent profits on the engines of the economy, a private domestic buyer,” wrote Ryan Sweet, chief economist at Oxford Economics.
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“This is being tested now as the economy is being hit by several shocks, including tariffs, supply chain stress, tougher financial market conditions, and uncertainty, but daily data means that the economy's engine did not stall earlier in the quarter,” he said.
“First quarter data on GDP highlights the federal reserve constraint. The economy was essentially stagnant in the first three months of the year, but the growth of headlines and core inflation accelerated, inciting concerns about stagflation,” Sweet added.
