Let's break down the latest US Q1 2025 GDP result (-0.2%).
The previous Q1 2025 GDP:
GDP growth = G + I + C + NE
Q1 GDP (2nd estimate) = (-0.12) + 3.98 + 0.8 + (-4.9) = -0.24 (-0.2)
As we compare the 2 estimates, we can see that govt spending (G) is still contracting, the Investment (I) is still expanding because of front-loading, the Consumption (C) is still declining and Net Export (NE) is also still decreasing due to front-loading (Import > Export).
As wholesalers and retailers stock up to avoid more tariffs, this will boost investment but cause net export to fall. However, we can see that the US consumption is in a free fall now.
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