The US economy shrinks 0.3 percent annually in the first quarter, as companies in the world’s largest economy responded to Donald Trump’s trade war by contributing to imports.
The sweets in GDP for the period was worse than the latest forecasts of economists and compared to a 2.4 % percentage registered for the fourth quarter.
The fall was largely the result of a hurry of US companies to accumulate inventory before Trump raising tariffsWith the US Bureau of the US Bureau on Tuesday showing the trade deficit for goods that hit a record high in March.
The difference between import and exports is an important factor in calculating GDP, which also measures domestic consumption, investment and government spending.
The stock futures dropped and the bond yield increased slightly after the data. The two -year yield of the Ministry of Finance, which is moving with interest expectations, was 0.01 percentage points to 3.66 percent.
There is no significant shift in expectations to reduce interest rates after data, with futures traders still appreciating in approximately four cuts this year.
Several Wall Street economists have reviewed their growth ratings in the first quarter down after the publication of the goods trade on goods on Tuesday.
The Economic Analysis Bureau, which produced GDP data on Wednesday, added that the decline in production for the first quarter also reflects the decline in government spending.
It states that such changes are partly, but not entirely, compensated by increasing investment, consumer costs and exports.
Trump’s trade war is expected to lead to more slow growth in the second half of this year, with higher prices weighing consumption.
The IMF said last week that the US GDP would expand by 1.8 % this year – compared to its January estimated 2.7 %. Many private sector forecasts do not predict any growth.
This is a developing story