US Economy Slows

The US economy shrank for the first time in three years last quarter, according to new data released yesterday.

The nation’s gross domestic product—or the value of all the goods and services it produced—declined at a 0.3% annual rate, short of expectations of 0.4% growth. The contraction, and an accompanying drop in consumer spending, came amid US tariff announcements fueling a surge in imports; those imports are subtracted from GDP. Economists are mixed on whether the second quarter will show a continued slowdown or whether it will rebound as US businesses reduce their imports. The data revealed a healthy pace of growth outside of imports and boosted investment in equipment. See more here.

A separate report yesterday from ADP showed private payrolls rising by 62,000 in April, far below the Dow Jones consensus estimate of 120,000. The combined reports caused experts to raise concerns about a potential recession in 2025.