An hour ago, the latest economic data had increased the fear of excitement, making it look like another positive day in the market.
The first was the ADP job number for April. Two days before the government’s own employment data in April, the ADP report showed just 62,000 private sector jobs created this month. It was the weakest printed material since July 2024.
Next was the government’s first estimate of GDP growth in the first quarter, 0.3% minus 0.3% against an estimate of 0.2%. The quarter ended in March, but economic actors are fully aware of the coming tariffs, but imports that were front-loaded at the beginning of the year. Returning to ECON 101, rising imports (without gains corresponding to exports) will cause GDP growth.
In fact, the export and import imbalance reduced GDP growth by nearly 5% in the first quarter. The Trump administration’s efforts, which is the first time the government has been dragging its GDP since 2022, have also been at work.
Looking at inflation, the core PCE price index embedded in the GDP report increased by 3.5% against an estimated profit of just 3.1%.
The Nasdaq is 2% lower, while the S&P 500 is 1.5%, with US stocks falling significantly. This is a hit with Bitcoin (BTC).