BREAKING: annualized US GDP for Q1 declined by 0.5% 📣📌

01:30 PM BST, United States - GDP data:

• GDP (Q1): actual -0.5% QoQ; forecast -0.2% QoQ; previous 2.4% QoQ;
• GDP Price Index (Q1): actual 3.8% QoQ; forecast 3.7% QoQ; previous 2.3% QoQ;
• GDP Sales (Q1): actual -3.1%; forecast -2.9%; previous 3.3%;
• PCE Prices (Q1): actual 3.7%; forecast 3.6%; previous 2.4%;
• Real Consumer Spending (Q1): actual 0.5%; forecast 1.2%; previous 4.0%;
• Corporate Profits: actual -3.3% QoQ; forecast -3.6% QoQ; previous -0.4% QoQ;

01:30 PM BST, United States - Durable Goods for May:

• Durable Goods Orders: actual 16.4% MoM; forecast 8.6% MoM; previous -6.6% MoM;
• Core Durable Goods Orders: actual 0.5% MoM; forecast 0.1% MoM; previous 0.0% MoM;
• Durables Excluding Defense: actual 15.5% MoM; previous -7.7% MoM;
• Durables Excluding Transport: forecast 0.0% MoM; previous 0.2% MoM;
• Goods Orders Non Defense Ex Air: actual 1.7% MoM; previous -1.4% MoM;

01:30 PM BST, United States - Employment Data:

• Initial Jobless Claims: actual 236K; forecast 244K; previous 246K;
• Jobless Claims 4-Week Avg.: actual 245.00K; previous 245.75K;
• Continuing Jobless Claims: actual 1,974K; forecast 1,950K; previous 1,937K;

01:30 PM BST, United States - Balance of Tade Data for May:

• Goods Trade Balance: actual -96.59B; forecast -86.30B; previous -86.97B;

While trade figures showed an improvement compared to the second estimate, that positive was offset by softer consumer spending. This raises concerns about the outlook. The headline figure saw a significant increase, but it’s largely influenced by a spike in transport orders—particularly aircraft and vehicles—driven by tariffs. Nevertheless, underlying core orders remain strong.

The stock market reacted with a sudden drop followed by a sharp rebound. Despite the GDP data entering contraction territory for the first time since 2022, this time the cause is the anticipated trade war that began at the start of Q2. The data isn't terrible, but it’s not encouraging either. Following the release, traders are now pricing in higher odds of a Fed rate cut at the end of July (26%).