U.S. gross domestic product (GDP) contracted slightly in the first quarter, although the report was heavily distorted by trade-related factors. Businesses and consumers alike are adjusting to tariffs, and they’re not very happy about it. Trade between the U.S. and China has plummeted. The impact of tariffs will hit the U.S. economy with a lag, but it’s hitting China now. Weakness in industrial metals may be a sign of economic weakness ahead. Job openings continue to grind lower. Don’t underestimate demographics. The U.S. Dollar. Bad news is bad news.
1. Unfortunately, adjusting for trade-related factors isn’t as simple as just adding back net exports. The surge in imports to front-run tariffs likely also boosted inventories and spending:
2. For example, durable goods spending spiked in March, which is unusual at the start of the year:
3. Unsolicited comments on government economic policy from University of Michigan survey respondents are off the charts:
4. Companies are going to have to stretch their inventories while they find alternative suppliers, assuming that tariffs on Chinese goods remain at current levels:
5. Although the U.S. imports more than in exports from China, some level of trade does go both ways:
6. China’s manufacturing sector contracted in the most recent month:
7. Copper rallied on easing trade tensions, but has since retraced some of those gains:
8. The U.S. oil industry may struggle at current prices:
9. Ideally, we’d like to see the ratio of job openings to unemployed workers remain above one:
10. Younger societies consumer more than older ones:
11. The Dollar’s recent move was highly unusual, declining as U.S. interest rates rose relative to those in other countries:
12. Policy uncertainty has the Federal Reserve on hold, so there’s no silver lining to bad economic data:
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