Ed Krassenstein: Trump economy faces downturn as GDP and inflation diverge
@EdKrassen: Trump economy faces downturn
The U.S. economy under the administration of former President Donald Trump has just received disconcerting news as the first quarter GDP figures show a contraction of 0.3 percent, which is notably below the expected growth of 0.3 percent.
The unexpected decline in GDP is accompanied by a rise in the core PCE price index, which measures inflation, increasing by 3.5 percent. These figures indicate that inflation is on the rise while economic growth is in the negative, raising concerns among economists about a possible recession.
The odds of an economic recession have now increased to approximately 74 percent, a troubling sign for economic stability. Analysts believe that these economic indicators challenge Trump's previous assertions about improving economic conditions and lowering prices.
James Rathbone, a senior economist at Global Economics, explains, ''The upward pressure on prices coupled with shrinking GDP points to stagflation, a scenario policymakers and businesses dread.''
Economic experts are now focusing on strategies to mitigate these troubling trends, urging for balanced fiscal and monetary policies to steer the economy back on the growth trajectory.
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In the previous news, tweet author Ed Krassenstein discussed the potential impact of trade tensions on American companies and supply chains, highlighting Porsche's decision to raise prices and China's strategic shift to minimize dependence on US pharmaceuticals. Read more about the implications of trade disputes.
