Skip to main content
PGIM LogoPGIM Logo
US Flag MIM
Markets in Motion

US Economy Downshifts Amid Fog of Trade WarUSEconomyDownshiftsAmidFogofTradeWar

May 1, 2025

Share
  • Mail
  • LinkedIn
  • Twitter
  • Copy URL
  • Print

Share

The US economy registered a modest contraction in the first quarter, as tariff uncertainty and mounting trepidation across corporate America test the resilience of the world’s largest economy. GDP shrank at an annualized rate of 0.3% in the three months through March, driven by a surge in imports leading up to the tariff rollout, according to the Commerce Department’s initial estimate on Wednesday. The economy grew at a 2.4% pace in the fourth quarter. A downshift in the US economy has stoked recession fears, given the risk that tariffs could elevate inflation and challenge both business and household balance sheets. The monthly jobs report on Friday is forecast to show that hiring cooled in April. Economists anticipate a gain of 133,000 jobs versus 228,000 during the prior month—enough to keep the unemployment rate at 4.2%.

Corporate earnings from Silicon Valley and other industries provided another bellwether for how the trade war could impact businesses and economic activity overall. With the tariff endgame still to be determined, some companies have dimmed their outlook for profits and sales—or erased guidance altogether—as they brace for higher costs and potential disruptions to their supply chains. However, first-quarter earnings for members of the S&P 500 are on track to rise 10.1% year-over-year, based on a FactSet analysis of reported and projected results last Friday. As PGIM Fixed Income notes in the latest edition of Weekly View from the Desk, the start of the third quarter is shaping up as a future milestone for the economy, as tariff effects and negotiations over tax and spending plans come into better view.

Read more
Learn More
Markets in Motion

Timely insights from across PGIM

Learn More

You may also like

Markets Cheer US-China Trade Truce
Markets in Motion

Markets Cheer US-China Trade Truce

May 14, 2025

A truce between the US and China gave investors and the global economy a reprieve from recent trade jitters.

Fed Wary of Inflation, Labor Risks
Markets in Motion

Fed Wary of Inflation, Labor Risks

May 8, 2025

The Fed left rates unchanged as it awaits answers on trade policy and a clearer view of the economic outlook.

Trade Anxiety Maintains Hold on Markets
Markets in Motion

Trade Anxiety Maintains Hold on Markets

Apr 23, 2025

As the possibility of tariff-induced economic disruption hangs over the global outlook, investors remain anxious to see results from ongoing US trade talks.

PGIM Logo
  • Terms & Conditions
  • Privacy Center
  • Accessibility Help
  • UK Regulatory Disclosures
  • Netherlands Regulatory Disclosures
  • Canadian Regulatory Disclosures
  • Ireland Gender Pay Gap Report
  • Cookie Preference Center

For Professional Investors only.* All investments involve risk, including the possible loss of capital.

This material is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence. PGIM is the principal asset management business of Prudential Financial, Inc. and a trading name of PGIM, Inc. and its global subsidiaries. PGIM, Inc. is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not imply a certain level of skill or training.

The information on this website is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. In making the information available on this website, PGIM, Inc. and its affiliates are not acting as your fiduciary.    

In the United Kingdom, this website may be issued by PGIM Private Alternatives (UK) Limited or PGIM Private Capital Limited.  In the European Economic Area (“EEA”), this website may be issued by PGIM Private Capital (Ireland) Limited or PGIM Luxembourg S.A. or PGIM Real Estate Germany AG.

PGIM, Inc. has its headquarters at 655 Broad Street, Newark, NJ 07102. PGIM Private Capital (Ireland) Limited has its registered office at IDA Business Park, Letterkenny, Co. Donegal, F92 FP83, Ireland. PGIM Private Capital (Ireland) Limited is authorised and regulated by the Central Bank of Ireland and registered in Ireland under company number 635793 operating on the basis of a European passport. PGIM Limited and PGIM Private Alternatives (UK) Limited have their registered offices at Grand Buildings, 1-3 Strand, Trafalgar Square, London WC2N 5HR. PGIM Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number: 193418). PGIM Private Alternatives (UK) Limited is authorised and regulated by the FCA of the United Kingdom (Firm Reference Number: 181389). PGIM Private Capital Limited has its registered address at 1 London Bridge, London SE1 9BG and is authorised and regulated by the FCA of the United Kingdom (Firm Reference Number: 172071). PGIM Luxembourg S.A., Netherlands Branch is registered with the Netherlands Chamber of Commerce under number 85998877 and has its local offices at Gustav Mahlerlaan 1212, 1088LA Amsterdam, The Netherlands. PGIM Luxembourg S.A. has its registered address at 2 Boulevard de la Foire, L-1528 Luxembourg and is authorised and regulated by the Commission de Surveillance du Secteur Financier (“CSSF”) in Luxembourg (registration number A00001218). PGIM Real Estate Germany AG has its registered address at Wittelsbacher Platz 1, 80333 Munchen, Germany and is authorised and regulated by Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”) in Germany (registration number 10138142).

In Japan, information is provided by PGIM Japan Co., Ltd. (“PGIM Japan”) and/or PGIM Real Estate (Japan) Ltd. (“PGIMREJ”).  PGIM Japan, a registered Financial Instruments Business Operator with the Financial Services Agency of Japan offers various investment management services in Japan.  PGIMREJ is a Japanese real estate asset manager that is registered with the Kanto Local Finance Bureau of Japan.

In Hong Kong, information is provided by PGIM (Hong Kong) Limited, a regulated entity with the Securities & Futures Commission in Hong Kong to professional investors as defined in Section 1 of Part 1 of Schedule 1 of the Securities and Futures Ordinance (Cap. 571). In Singapore, information is issued by PGIM (Singapore) Pte. Ltd. (“PGIM Singapore”), a regulated entity with the Monetary Authority of Singapore under a Capital Markets Services License to conduct fund management and an exempt financial adviser. This material is issued by PGIM Singapore for the general information of “institutional investors” pursuant to Section 304 of the Securities and Futures Act 2001 of Singapore (the “SFA”) and “accredited investors” and other relevant persons in accordance with the conditions specified in Section 305 of the SFA. In South Korea, information is issued by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean qualified institutional investors on a cross-border basis.   

Prudential Financial, Inc. (“PFI”) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. 

*PGIM.com/Podcasts and its content is intended for informational or educational purposes only and is not directed exclusively to Professional Investors. 

You are viewing this page in preview mode.

Edit Page