Closing post
Time to wrap up…
The US economy shrank in the first three months of Donald Trump’s second term as the president sought to roll out an aggressive trade strategy, claiming that sweeping tariffs on the world would strengthen the US economy.
Gross domestic product (GDP), a key measure of overall growth in the US economy, fell by 0.3% in the first quarter of the year, on an annualised basis, down from 2.4% in the last quarter of 2024. The contraction – the first since the start of 2022 – puts the US on the brink of a technical recession, defined by two quarters of negative growth.
The drop in activity comes amid a huge fall in consumer sentiment, which in April dropped 32% to its lowest level since the 1990 recession.
Trump spent much of the first quarter threatening, and fleetingly implementing, sweeping tariffs on Canada and Mexico, and targeting China with higher duties on its exports.
Here’s the full story:
Economists blamed the fall in GDP on a surge of imports in the quarter, which subtracted from growth.
Trump, though, has blamed the “Biden “Overhang”” adding, this has “NOTHING TO DO WITH TARIFFS”.
His trade advisor, Peter Navarro, claimed it was the best negative GDP print he had seen.
Wall Street investors are unimpressed, though, as the S&P 500 share index is down 1%.
The UK’s FTSE 100 index, though, has posted a 13-day winning run.
The US GDP report capped a busy data for economic data, with both France and Germany returning to growth, helping the eurozone to expand by 0.4% in the January-March quarter.
FTSE 100 extends its winning run to 13 days
The UK’s stock market’s winning run has continued today, despite disappointment over the US growth report.
In London, the FTSE 100 share index has closed 31 points higher tonight at 8494 points.
That’s its highest closing level since 2 April, just before Donald Trump announced his new ‘Liberation Day’ tariffs.
It means the index has now risen for 13 days in a row, the longest run of gains since January 2017 when it posted a 14-day winning run.
