What an hour ago resembled another positive day in the markets has become decidedly negative, since the latest economic data fed the growing fears of stagning.
First was the number of ADP jobs for April. Arriving two days before government employment data for April, the ADP report showed only 62,000 private sector jobs created this month, very less than estimates of 108,000 and 147,000 March. It was the weakest impression since July 2024.
The following was the first estimate of the GDP growth of the first quarter, which reached 0.3% negative against estimates of 0.2% positive. While the quarter ended in March, the economic actors, fully aware of the next rates, the imports loaded with front at the beginning of the year. Returning to Econ 101, the increase in imports (in the absence of a corresponding gain in exports) are a drag on GDP growth.
In fact, export imbalance reduces GDP growth by almost 5% in the first quarter. The Doge efforts of the Trump administration was also at work, with the government spending a drag on GDP for the first time since 2022.
Regarding inflation, the central PCE price index integrated within the GDP report increased by 3.5% compared to estimates for a gain of only 3.1%.
Everything adds to a great drop in US actions, with the lowest Nasdaq and S&P 500 by 1.5%. That is coming to Bitcoin (BTC), which has passed approximately 1% with $ 94,300.
