Falling US consumer spending and a widening goods trade deficit at the start of the year suggest the world's largest economy is showing signs of slowing.
US consumers cut spending
US consumers unexpectedly cut spending on items like cars in January due to harsh winter weather. If the slowdown in services spending continues, it could raise concerns about the stability of the economy.
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| The US currently imports more food than it exports. Falling US consumption could raise concerns about the stability of the economy. Illustration photo |
The U.S. goods trade deficit widened sharply in January to a record high as imports surged. The deficit increased 25.6% to $153.3 billion. Based on trade and consumer spending data, U.S. GDP is expected to contract 1.5% year-on-year in the current quarter, down from the 2.3% growth previously forecast, according to the Federal Reserve Bank of Atlanta's latest GDPNow forecast.
Doug McMillon, CEO of the world’s largest retailer, Walmart Inc., said U.S. consumers are facing financial stress as food prices remain high. Some consumers run out of money before the end of the month and have to switch to buying smaller packages, McMillon told executives at the Economic Club of Chicago.
Global Economic Highlights
US President Donald Trump has publicly stated that Europe needs to defend itself. After this statement, the countries in the European Union (EU) realized that they need to strengthen their self-defense capabilities, instead of just relying on help from the US.
Britain will face severe price rises and congestion as a result of the Labour government’s plans to ramp up construction projects. According to a report by the Boston Consulting Group, one of the world’s largest and most influential management consulting firms, £900 billion (about $1.1 trillion) will be spent on public and private infrastructure by the end of 2029 – nearly triple the level of spending five years ago.
German households are now paying 31% more for energy than they did before the crisis in 2022, according to a study, posing a serious challenge for the new government. Taxes and grid charges, which make up the bulk of what consumers pay, have also increased.
India, the fastest-growing major economy, saw strong economic growth in late 2024 on the back of rising government spending and robust rural consumption. The Statistics Department has revised India's GDP for previous quarters.
The number of newborns in Japan continued to fall to a record low, highlighting the growing challenge of coping with rising social security costs and a shrinking workforce. In 2024, the number of births fell 5% from the previous year to 720,988, the lowest since records began in 1899 .
| According to the latest GDPNow forecast from the Federal Reserve Bank of Atlanta, US GDP will decline 1.5% year-on-year in the current quarter, down from the previously forecast 2.3% growth. |
Source: https://congthuong.vn/bieu-do-kinh-te-toan-cau-tieu-dung-my-dang-suy-giam-376427.html
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