The Globe and Mail reports in its Thursday edition that the chaotic start to President Donald Trump's second term unsettled the economy, as consumers and businesses grappled with numerous tariff announcements and policy changes. A New York Times dispatch to The Globe reports that this uncertainty led to a surprising 0.3-per-cent decline in U.S. gross domestic product in the first quarter, according to the Commerce Department, a stark contrast to previous strong growth.
While the decline was partially due to measurement quirks and more reliable data suggested only a slowdown rather than a contraction, it underscored the real impact of Mr. Trump's policies. Consumers rushed to purchase cars and goods before tariffs took effect, while businesses stocked up on equipment and materials in anticipation of the trade war. Trump adviser Peter Navarro stated that the GDP figures should be "very positive news for America." Few economists agree. The first quarter showed solid growth, but forecasts predict slowing spending and investment ahead due to rising prices from tariffs and uncertainty affecting businesses. Nationwide's Kathy Bostjancic says, "Hiring has already stalled and we expect the unemployment rate to start to rise."
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