Economy

Updates on the state of the economy, growth, inflation, and employment.

Economy
IMF downgrades global growth outlook; tariffs continue
The International Monetary Fund on Tuesday cut growth forecasts for the United States, China and most other nations, as a result of turbulent U.S. tariffs. These ongoing tariffs, a result of the Trump administration, have hit a 100-year high and caused the IMF to not only slash forecasts but also issue a warning that further global trade tensions will worsen the situation. The new guidance was released in the World Economic Outlook, which was put together in the 10 days after Trump began to announce his new, much higher baseline tariffs on the majority of the U.S.'s trading partners. Global growth forecast in the Outlook was subsequently cut by 0.5 percentage points to 2.8% for 2025, and by 0.3 percentage point to 3% from its previous forecast in January, which estimated growth would reach 3.3% in both years. The IMF also said inflation was expected to decline more slowly than was originally expected in January, and said the report was a “reference forecast”. Zooming in to specific nations, the forecast for U.S. growth was pulled back to 1.8% for 2025, a full percentage point down from 2.8% growth last year and China's growth forecast was cut to 4% for both 2025 and 2026.
Economy
Fed: Businesses pushing tariff costs onto customers
Businesses are looking for ways to push costs onto customers to deal with the early stages of President Donald Trump’s tariffs, according to a Federal Reserve report. Tariffs were a hot topic in the Fed report, mentioned 107 times, which is over double the number mentioned in the last Beige Book. The report also found the outlook “worsened considerably” in several regions as economic uncertainty increased. Companies reported getting notices from suppliers about rising costs and were trying to find ways to not absorb costs but instead pass them along to customers in this time of uncertainty. “Most Districts noted that firms expected elevated input cost growth resulting from tariffs,” the report said. “Many firms have already received notices from suppliers that costs would be increasing.” Prices generally rose from the previous report, especially after Trump’s 2 April liberation day announcement of blanket tariffs. The report mentioned variations of the word “uncertain” 89 times, and firms reported adding tariff surcharges or shortening pricing horizons to account for this. “Most businesses expect to pass through additional costs to customers. However, there were reports about margin compression amid increased
Economy
China warns of 'resolute' countermeasures to U.S tariffs
China has warned it will take “resolute” countermeasures against other countries who negotiate with the United State's that will harm China's interests. These comments come in the wake of soaring global tariffs from the Trump administration, which saw Beijing slapped with a whopping 145% base tariff this month. Now, China’s commerce ministry has responded, saying that there will be countermeasures against other countries who engage in future U.S. deals that are made at the expense of China's best interests, warning that this approach “will ultimately fail on both ends and harm others”. “China firmly opposes any party reaching a deal at the expense of China’s interests,” the ministry said on Monday. “Appeasement will not bring peace, and compromise will not be respected … To seek one’s own temporary selfish interests at the expense of others’ interests is to seek the skin of a tiger.”
Economy
Trump meets with major retailers over tariff concerns
U.S. President Donald Trump has met with the nation’s largest retailers to discuss how tariffs could impact their production-heavy. He met with the CEOs of Walmart, Target, Home Depot and Lowe's at the White House, as reported by Bloomberg. After the meeting wrapped up, the companies each issued statements sharing the same sentiments. “We had a productive meeting with President Trump and his team and appreciated the opportunity to share our insights,” a Walmart spokesperson said. “We had a productive meeting with President Trump and our retail peers to discuss the path forward on trade, and we remain committed to delivering value for American consumers,” read the statement from Target. “We had an informative and constructive meeting with the President and look forward to continuing the dialogue,” Home Depot’s statement said. According to a White House statement provided to CNBC, the meeting “went very well”. The meeting took place due to uncertainty over the Trump administration's tariffs, which have sent the market tumbling. Walmart chief financial officer, John David Rainey told investors earlier this month that two-thirds of the company’s products are U.S. made and vowed to keep prices low amid tariffs.
Economy
Markets drop as Trump steps up attacks on Powell
United States President Donald Trump has continued to lambast Federal Reserve Chair Jerome Powell for declining to cut interest rates, with markets sinking after his comments. The administration is studying whether it could fire Powell, though Powell has said he will not step down from his position if asked. The Federal Reserve chair is a nonpartisan position, and according to Powell, Trump does not have the legal authority to remove him. “‘Preemptive Cuts’ in Interest Rates are being called for by many,” said Trump on his social media network Truth Social. “With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW,” Trump wrote. The Dow Jones fell by almost 2% within in its first hour of trading on Monday amid Trump’s criticism of Powell, while the NASDAQ dropped by 2.6%. The U.S. Dollar Index slumped to 97.92, its lowest levels since 2022. Trump has pushed for interest rate cuts in a bid to mitigate the economic slowdown prompted by the U.S.’ introduction of tariffs on all other nations last month. Powell said last week that these tariffs would ha

Economy
Federal Reserve's projections signal heightened caution
The Federal Reserve recently updated its quarterly economic projections and provided fresh insights into the outlook for growth, inflation, and monetary policy. Central bankers are signalling a slowing pace of economic expansion and mounting uncertainties, prompting a reevaluation of policy measures in the face of persistent inflationary pressures and global headwinds.Projections Revised DownwardThe Fed’s latest projections, detailed in its official FOMC projection table, indicate a downward revision in economic growth and a more elevated inflation outlook. According to projections, real gross domestic product (GDP) growth is now expected to reach 1.7% by the end of 2025, a notable decrease from the previous forecast of 2.1%. Similarly, the labor market is anticipated to weaken slightly with unemployment projected to rise from 4.3% to 4.4%, while core personal consumption expenditures (PCE) inflation is forecast to conclude 2025 at 2.8% - up from 2.5% in earlier estimates.Credit: U.S. Department of Agriculture / flickrPolicy and Projection InsightsThe revised forecasts were accompanied by speeches and public remarks by key Fed officials and regional leaders. At a recent economic summit, Federal Reserve Bank of Minneapo
Economy
National unemployment ticks up to 4.1% in March
Australia’s seasonally adjusted unemployment rate edged up to 4.1% in March, according to data released by the Australian Bureau of Statistics (ABS) on Thursday. “With employment increasing by 32,000 people and the number of unemployed increasing by 3,000 people, the unemployment rate rose slightly to 4.1% for March,” said Sean Crick, ABS head of labour statistics. The rise marks a slight increase from February’s 4.0% reading, though it remained marginally below market expectations of 4.2%. Despite the increase in employment, total hours worked fell by 0.3% - marking the second consecutive monthly decline. Crick attributed this drop to unusual weather disruptions: "A higher than usual number of people reported working reduced hours this month due to bad weather, coinciding with ex-Tropical Cyclone Alfred and other major weather events in New South Wales and Queensland." The participation rate ticked up to 66.8% in March, while the employment-to-population ratio held steady at 64.1%, suggesting the broader labour force continues to expand even amid shifting conditions. Meanwhile, ahead of its 19-20 May meeting, the Reserve Bank of Australia are set to receive one more employment report and the closely watched quarter
Economy
California files lawsuit to stop Trump enforcing tariffs
California Governor Gavin Newsom has taken the unprecedented move of filing a lawsuit directly challenging the emergency power United States President Donald Trump has deployed to impose tariffs that have demolished global trade. Newsom’s lawsuit – the 16th California has filed against Trump since January - challenges the President's right to evoke the International Emergency Economic Powers Act (IEEPA) to enact the tariffs. Ultimately, the lawsuit argues that Trump has exceeded the bounds of presidential power outlined in the law. The IEEPA, passed in 1977, gives the president broad authority to regulate certain financial transactions when declaring a national emergency in response to an “unusual and extraordinary threat.” The IEEPA traditionally sanctions countries, companies and individuals.What does California want?What Newsom specifically wants the federal court judge presiding over the case to do is bar the Departments of Homeland Security and Customs and Border Protection from enforcing the tariffs. “President Trump’s unlawful tariffs are wreaking chaos on California families, businesses, and our economy — driving up prices and threatening jobs,” Newsom said. “We’re standing up for American families who ca
Economy
UK's inflation rate slows to 2.6%, but won't last long
The United Kingdom's annual inflation has slowed from 2.8% in February to 2.6% in March, according to data released by the Office for National Statistics (ONS). This is lower than the analysts' forecast of 2.7% and a sharp turnaround. These notes a sharp turnaround from the 3% inflation reported in January. It’s also a 0.6% decrease from the same time last year. Core inflation, which includes energy, food, alcohol, and tobacco prices, rose by 3.4% in the year to March, slightly down from 3.5% last year. According to the ONS report, the largest downward contribution came from recreation and culture and motor fuels as well as a downward effect from housing and household services, partially offsetting the upward contribution from clothing. While inflation is trending down, U.K. households aren’t out of the woods yet. The Bank of England predicts a rise to 3.6% in April due to a string of bill hikes that are set to come into effect. The Trump administration's tariffs could also have an impact on inflation, with economists giving mixed reviews. The Resolution Foundation's research director, James Smith, said that the U.K’s inflation hinges on the tariffs. “Global trade uncertainty could drive down our prices, with