A customer service for products in a Heb food business on February 12, 2025 in Austin, Texas.
Brandon Bell | Getty pictures
According to a measure by the Federal Reserve Bank of Atlanta, the early economic data for the first quarter of 2025 point to negative growth.
The GDPnow tracker of the central bank from incoming metrics indicates that the gross domestic product for the period from January to March after an update on Friday morning shrinks by 1.5%.
Fresh indicators showed that consumers were less than expected during the bad weather and exports in January, which led to downgrading. Before the consumer expenditure report on Friday, the GDPnow had a growth of 2.3%in the quarter.
While the tracker is volatile and usually becomes a more reliable measure much later in the quarter, he coincides with some other measures that show a weakening of growth.
“Regardless of the inherent volatility of the very high frequency 'Nowcast', which was cultivated by the Atlanta Fed,” said Mohamed El-Erian, chief economic consultant at Allianz and President of Queens College Cambridge, in a post at the social media location X.
The advertisement had pointed to GDP profits of up to 3.9% in early February, but has decreased since then because additional data has been received.
On Friday, the trade department reported that personal expenses in January decreased by 0.2% and that Dow Jones's estimate for an increase by 0.1% missed. Adjusted inflation, the expenditure fell by 0.5%. As a result, this shaved a complete percentage point of the expected contribution to GDP to 1.3%, depending on the BDPNOW calculation.
At the same time, the contribution of net exports from -0.41 percentage points fell to -3.7 percentage points.
The combination of data and its effects on the growth prospects forms with surveys that show a decreasing trust of consumers and concerns about increasing inflation. The trade department also reported that an inflation measure became lower in the course of the month, since the price index for personal consumption expenditure decreased to 2.6%, which decreased by 0.3 percentage points compared to December.
The week also brought some of news from the labor market because the initial unemployment claims reached a level that was recently higher in early October.
In addition, the bond market also has more slow growth. The 3-month Ministry of Finance this week switched over the 10-year note, a historically reliable indicator of a recession on the 12 to 18-month horizon.
The economic and political uncertainty has led to a bumpy start to the year for the stock market. The Dow Jones Industrial Average rose by 2% in a fleeting news cycle in 2025.
“I have the feeling that the complacency that has crept into asset markets is disturbed,” said Joseph Brusuelas, head of the US economist at RSM.
The markets are increasingly believing that the FED will react to the slowdown with several interest reductions this year. The dealers of the FED -FUTS -FUTURES market increased the probability of a quarter percentage point in June in June to about 80% on Friday afternoon and increased the possibility of three such cuts this year.
Comments are closed.