April was one of the most turbulent months in recent financial market history, capped by an important data release on Wednesday (30) that showed the US economy shrank in the last quarter for the first time since 2022.
The country’s Gross Domestic Product (GDP) — the total value of goods and services — shrank at an annual rate of 0.3%, below the 2.4% growth in the last three months of 2024, the Department of Commerce reported. It is the worst quarterly performance for the US economy since early 2022, when the economy was recovering after a drop during the COVID-19 pandemic.
The US economy was expected to show 0.8% growth in the first three months of 2025, according to average estimates.
The slowdown comes amid growing concerns that Trump’s tariffs could harm the US economy, with some economists betting the country will enter a recession in 2025.
The Dow Jones fell 500 points, or 1.25%. The S&P 500 fell 1.5% and the Nasdaq Composite, made up of technology companies, fell 2% on Wednesday morning.
Trump posted on social media: “This is Biden’s stock market, not Trump’s. I only took office on January 20.”
“The tariffs will take effect soon, and companies are starting to move to the US in record numbers,” Trump wrote. “Our country will prosper, but we need to get rid of Biden’s ‘excess’. This will take time, IT HAS NOTHING TO DO WITH TARIFFS, just that he left us with bad numbers, but when the boom starts, it will be like no other. BE PATIENT!!!”
Trump’s tariffs were announced on April 2, after the end of the first quarter, but companies anticipated and increased exports to avoid future tariffs. An increase in imports may have reduced economic growth and decreased domestic consumption, according to some economists.
Following this reasoning, GDP may get a boost in the second quarter, as companies will import fewer products during the period. Otherwise, when GDP is negative for two consecutive quarters (that is, there is no growth, but rather loss), it is understood that the country has entered a technical recession.
Source: CBS News and CNN