Us economy: The US economy has recorded a decline of 0.2 percent in the January-March first quarter between President Donald Trump’s trade war. This is the first time in three years when America’s GDP has declined. The government released a second estimate on Thursday, which is somewhat better than its previous estimate. The country’s growth declined due to a steep decline in imports in the first quarter, as there was a hurry to bring foreign goods before the President in the US imposed heavy import duty.
Import increased at the fastest speed after the third quarter of 2020
The decline in January-March (production of goods and services in the country) reversed 2.4 percent growth in the fourth quarter of 2024. Import increased at a rate of 42.6 percent, which is the fastest speed after the third quarter of 2020. This reduced the GDP growth by more than five percent. Consumer spending also declined sharply. GDP is reduced by trade deficit. But this is mainly a matter of mathematics.
Final edition of three estimates of Commerce Department will come on 26 June
The GDP should only be counted in the domestic level. Therefore, imports have to be reduced to prevent domestic production from increasing artificially. It is counted as consumer expenses in the government GDP report. The boom in imports in the first quarter will probably not be repeated in the April-June quarter and therefore, the GDP should not be loaded. Thursday’s report was the second of the three estimates of the Commerce Department of the GDP of the first quarter. The final version will come on 26 June.
Inflation reduced for the third consecutive month in April
Let us tell you that earlier, the US Labor Department had released inflation figures on 13 May. According to official data, in April, the US retail inflation came to 2.3 percent in a consecutive month. The Labor Department stated in the data that in April, consumer prices rose 2.3 percent compared to 1 year ago, which is the lowest increase in 4 years. The retail inflation rate was 2.4 percent on an annual basis in March.
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