The chaos on duties It is part of a growth context that since the beginning of the year has seen the United States show signs of slowing down, while so far the eurozone was recovering, albeit from very low levels. Underlines it Filippo Casagrande, Head of Investments, Generali Investments Explaining that the duties, although applied to a reduced extent for the next three months, risk negatively impacting the expectations of families and businesses, with the former that could increase the precautionary savings and reduce consumption in view of a loss of purchasing power, while the latter could delay investment decisions. In addition, recent losses on financial markets could be a negative wealth effect. On the other hand, the decisive drop in oil prices (dropped up to 60 dollars a barrel, the lowest level from April 2021) can constitute a strong support element for the real income of families, and reduce the reduction risks on consumption.
Using GDP in contraction
Looking at the United States more in detail, the Annualized GDP of the first quarter 2025 braked at -0.3%, Falling from the previous +2.4%, thus marking a negative growth for the first time from 2022 for the USA, while expectations were still for a positive figure ( +0.2%).
Weighs boom import duties
The decrease in GDP in the first quarter – explains the expert – mainly reflected an increase in imports e a decrease in public spending. The increase in imports, which are a subtraction in the calculation of GDP, was particularly significant, recording a leap of 41.3%. This surge has been driven by consumer goods, in particular pharmaceutical products, medicines and vitamins, and by instrumental assets such as computers and components. This increase in imports was partly attributed to importers who preordained products to anticipate the implementation of the duties announced by the Trump Administration. Federal public spending has seen its most clear drop from the first quarter 2022, decreasing by 5.1%. Public spending as a whole has shown a decrease.
The View of Generali Investments
A possible second consecutive quarter of contraction of the GDP “would indicate a technical recession”.
As for the USA worldwide, given the extreme volatility of the markets, we can comment that, “if on the one hand, we have more favorable assessments and the current high levels of volatility are usually consistent with positive returns in the next 12 months, on the other hand, unfortunately we still know little on the negative impact on the estimates of the profits deriving from the uncertainty caused by the duties “.
