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US Economic Slowdown Looms as Tariffs Impact Growth: Analysts Predict Contraction
Analysts expect a significant slowdown in the US economy, with GDP growth predicted at just 0.4% in Q1. New tariffs and trade policies under Trump’s administration are blamed for the sharp downturn.
ND
by News Desk
2025-04-30
US Economic Slowdown Looms as Tariffs Impact Growth: Analysts Predict Contraction

The US economy is on track for a significant slowdown, with analysts forecasting a sharp drop in GDP growth in the first quarter of the year. Moody’s Analytics economist Matt Colyar has predicted a dramatic slowdown, estimating growth at just 0.5%, far below the 2.4% annualized rate seen in the final quarter of 2024.

This slowdown comes in the wake of a series of tariffs introduced by President Trump after his return to office on January 20. These tariffs, aimed at resetting US trade relations with top partners, have already sparked volatility in financial markets, with investors spooked by the unexpected policy changes.

Tara Sinclair, an economics professor at George Washington University, noted the significant departure from usual government policy, saying that dramatic policy shifts had directly weakened the economy. The tariffs have caused a surge in imports as consumers and businesses rushed to buy goods before the levies took effect, further complicating the GDP data.

The economic impact of these tariff policies is expected to play out in the coming months, with some economists predicting a contraction in the first quarter. However, even if the economy avoids contraction, the slowdown is expected to be significant. The market consensus is for annualized GDP growth of just 0.4% in Q1, a sharp contrast to previous growth expectations of around 2%.

Despite the tariff impact, there are signs of strength in the labor market. Employment figures have exceeded expectations, leading some analysts to suggest that other factors may be at play, potentially offsetting the negative impacts of the tariffs. Belinda Roman, an associate professor of economics at St. Mary’s University, indicated that while a slight contraction might occur, increased employment could provide some relief, but negative impacts are expected to become more evident in the second and third quarters.

The introduction of tariffs has also led to tensions in global trade relations, with China responding with its own set of tariffs on US goods. As trade talks continue and the effects of these tariffs unfold, the economic outlook remains uncertain, with the full impact of these policy changes likely to be seen in the coming months.
Tagged:

USEconomy

TariffImpact

EconomicSlowdown
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