US President Donald Trump has urged patience in the face of a first quarter economic contraction, arguing that his tariffs will eventually lead to a boom in the United States economy.
Investors were left with little clarity on Wednesday about the health of the country’s economy despite a fresh report on gross domestic product, with the fallout from Trump’s sweeping tariffs muddying growth signals.
US gross domestic product fell at a 0.3 per cent annualised rate last quarter.
Imports jumped at a 41.3 per cent rate, resulting in a large trade gap that chopped off a record 4.83 percentage points from GDP.
On its face, the first-quarter data showing the first US economic contraction since 2022 was alarming and brought immediate pressure on US stocks.
But some economists had braced for an even deeper contraction and were encouraged by the data.
The weakness stemmed from a surge in imports as businesses sought to avoid higher costs from the new tariffs, a phenomenon that many analysts said was poised to reverse in coming months.
Investors faced a similar position as they had before the highly anticipated report, vulnerable to twists and turns in Trump’s very much unresolved trade war that stood to keep markets on edge and the potential for a recession still on the table.
Republican Trump blamed his Democratic predecessor, Joe Biden, for the poor showing.
“This is Biden’s Stock Market, not Trump’s,” he said on Truth Social.
“Our Country will boom, but we have to get rid of the Biden ‘Overhang.’
Trump added: “This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”
https://thewest.com.au/politics/trump-says-be-patient-as-us-economy-contracts-c-18543466
