Mei Ri Jing Ji Xin Wen·2025-05-03 06:25Economic Performance - The U.S. GDP contracted by 0.3% in Q1 2025, marking the worst quarterly performance since 2022 [4][20] - The contraction was driven by a significant increase in imports and a decrease in government spending, with net exports dragging down GDP by 4.83 percentage points [5][8] Consumer Behavior - Consumer spending, which accounts for about 70% of the U.S. economy, grew by 1.8% in Q1, down from 4.0% in the previous quarter, indicating a decline in consumer confidence [10][11] - Households are significantly cutting discretionary spending due to concerns about future financial stability, with actual dining out expenditures dropping by 3.0% [11][19] Business Sentiment - Major companies like PepsiCo and Procter & Gamble have lowered their profit forecasts, citing weakened consumer confidence [13] - The footwear industry has expressed survival concerns due to tariffs, with 76 brands, including Nike and Adidas, requesting exemptions from the tariffs [13] Employment Trends - Despite a stable unemployment rate between 4.0% and 4.2%, signs of structural fatigue in the labor market are emerging, with significant layoffs announced by companies like UPS [17] - The private sector added only 62,000 jobs in April 2025, the lowest since July 2024, indicating a slowdown in hiring [17] Inflation and Pricing - Consumer inflation expectations have surged, with a projected increase of 6.5% over the next year, the highest since 1981 [19][22] - Companies are likely to pass on increased costs to consumers due to tariffs, with retailers like Target and Amazon indicating potential price hikes [19][22] Economic Outlook - Experts suggest that the first quarter may signal the beginning of a recession, with a 70% probability of economic downturn anticipated this year [20][22] - The uncertainty surrounding trade policies and tariffs is expected to disrupt production and lead to further layoffs, particularly in sectors directly involved in trade [22]