Read the highlights of this week’s commentary from Helios:
- US real GDP fell 0.3% in the first quarter, the first decline since 2022, driven by a record surge in pre-tariff imports and a drop in federal spending. Net exports subtracted nearly 5 percentage points from GDP, the largest drag on record. Personal consumption rose 1.8%, above the 1.2% estimate, with gains in services and nondurable goods.
- The US added 177,000 jobs in April, beating expectations despite signs of slowing. Unemployment held at 4.2%, and wage growth remained steady at 3.8% year-over-year. Healthcare led gains, while manufacturing shed jobs. These strong employment figures suggest the Federal Reserve may maintain current interest rates in the near term, with a 97% probability of no change at the upcoming meeting.
- US manufacturing activity contracted in April, with the ISM PMI falling to 48.7 from 49.0. Production hit its lowest level since 2020, while new orders and exports remained weak. Input costs surged amid rising tariffs, and employment stayed in decline. Manufacturers expressed concerns over the volatile trade environment, with some citing “tariff whiplash” as a significant challenge affecting customer relations and operational planning.
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