Bassanese Bites: Race against time – May 05 2025
Global markets
Global stocks continued their rebound last week, driven by robust US economic data and renewed hopes for an easing in US-China trade tensions.
Despite anecdotal reports of potential economic disruptions from Trump’s tariff hikes, last week’s wave of economic data pointed to a slowing (but not recessionary) economy.
- Weekly jobless claims edged higher but remained low
- The ISM April manufacturing index dipped modestly lower (and by less than the market expected)
- Job openings dropped more than expected but remain reasonably high
- Consumer spending remained firm in March
- April employment was stronger than expected; and
- Annual inflation (per the core consumption deflator) was 2.6%, in line with market expectations.
Of course, Q1 GDP was weaker than expected with -0.3% annualised growth. But this reflects slower consumer spending and a DOGE-related fall in public demand. A surge in imports did mechanically reduce economic growth, though it shouldn’t diminish production. In addition, the impact was partially offset by a buildup in inventories. Finally, a diversion of consumer spending from domestic production toward imported goods was also likely a factor behind the weak GDP result.
