An hour ago looked like another positive day on the markets has become resolutely negative, as the latest economic data fueled increasing stagflation fears.
The first was the number of ADP work for April. Before the two days before the government’s employment data for April, the ADP report showed only 62,000 private sector jobs created this month, much fewer estimates for 108,000 and 147,000 in March. It was the weakest impression since July 2024.
Then, the first estimate of the Government of GDP growth in the first quarter, which was negative at 0.3% against estimates of 0.2% positive. While the quarter ended in March, economic actors – fully aware of the prices to come – imports on the front at the start of the year. To return to Econ 101, the increase in imports (in the absence of a corresponding gain in exports) are an obstacle to GDP growth.
Indeed, the imbalance of export-prortations reduced the growth of GDP by almost 5% in the first quarter. The Dogee efforts of the Trump administration have also been at work, the government spending GDP for the first time since 2022.
With regard to inflation, the basic PCE price index integrated into the GDP report increased by 3.5% compared to estimates for a gain of only 3.1%.
All of this is added to a sharp drop in American shares, with the Nasdaq less than 2% and S&P 500 by 1.5%. This strikes Bitcoin (BTC), which slipped approximately 1% alongside $ 94,300.
