The data confirms this: the American economy has just undergone its worst quarter since 2022. It has a negative growth of -0.3 % in the first quarter. This surprise decline in GDP is feared a decisive turning point for markets and investors. Upstream, trade tensions seem to get worse.
In short
- The American economy fell back to -0.3 % to T1, affected by Trump customs policies.
- Despite signs of weakness, economists believe that a recession is not yet confirmed.
An economy destabilized by Trump's policy
It's a fact! There new economic policy President Donald Trump provokes a real earthquake (and not only in the United States!). In just a few months, his pricing decisions have:
- accentuated the trade deficit;
- disrupted exchanges;
- weakens growth.
Result : GDP, adjusted to inflation, fell by -0.3 %. This is a figure well below 0.8 %forecasts.
According to the Commerce Department, this decline results mainly from an explosion in imports (+41.3 %) aimed at anticipating price increases. Upstream, exports only increased by 1.8 %. This dynamic jeopardizes World trade balance.
According to a report ::
The difference between imports and exports has reduced GDP the most since 1947.
Key engine of the economy, consumption has also slowed down. Concretely, it fell to 1.8 % (compared to 4 % before). Public spending has aggravated the trend. They dropped by -5.1 %.
That said, companies' investments rebounded by 9.8 %. Some analysts reflect this as an anticipation of Upcoming inflation.
Recession or simple slowdown in the economy?
Certainly, the GDP It is not enough yet to qualify the situation as technical recession. The fact is that this requires two consecutive quarters of contraction. Nevertheless, the signals are worrying.
In particular, we refer to the unemployment rate which remains low: 4.2 %. Added to this is the underlying demand, measured by final sales to private buyers, which is progressing slightly.
As Gregory Daco, economist at Ernst & Young, explains, however, the global economy Exposes considerably to a risk of marked slowdown (especially if the prices remain unchanged!). The coming months are therefore decisive.
The spectrum of a recession is not yet a certainty. However, the fundamentals of the American economy are crumbling. Investors and analysts remain suspended from the evolution of Trump's economic policy in a climate of increasing instability!
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