Honey, we shrunk the economy
US GDP just shrank for the first time in two years.
Are you OK? Like really.
We are well. If we have to be sad, we will do it with increased consumer spending. Let’s take it back. U.S. GDP – which measures the value of goods and services produced – has been rising steadily since its plunge at the start of the pandemic. Last year the economy grew the fastest since the 1980s. But yesterday the Commerce Department said GDP fell 1.4% in the first three months of this year.
A whole host of reasons – from rising COVID-19 cases to inflation to the war in Ukraine. But the biggest takeaway is that the United States faces a trade deficit. Basically, Americans imported more products than they exported. But thanks to higher wages and a strong labor market, they still added to the basket and played their cards… music to economists’ ears. Many watched yesterday’s news and ignored warnings of a recession.
Sh. Don’t say that word.
Tell that to Bank of America and Deutsche Bank. They say a recession could occur as early as next year. But high consumer spending is a sign of good economic health. And many believe that GDP itself could jump in the next quarter – even if the Federal Reserve raises interest rates as expected. Meanwhile, inflation worries Democrats. Because he’s a chatterbox that no majority party wants in an election year.
Dear Econ 101, we forgive you but cannot forget you. From COVID-19 to inflation, the economy is giving us a boost. But many say it’s not time to start panicking just yet.
PS: We have tips on how to handle the ups and downs of the economy.
States vs. Roe: Oklahoma
Welcome to our series on abortion rights and restrictions. theSkimm is tracking state actions ahead of a landmark Supreme Court ruling expected by July. Here is the latest…
Yesterday, the Oklahoma legislature approved a Texas-style bill that would ban abortions after six weeks. There is no exception for rape and incest. Like Texas, it also encourages citizens to sue anyone who practices or helps someone to have an abortion. Governor Kevin Stitt (R) is expected to sign it.
The move comes weeks after the governor signed another anti-abortion bill into law, this one making it a crime to perform the procedure, which carries a sentence of up to 10 years in prison. Since January, hundreds of abortion restrictions have been introduced in more than 40 states.
Here is the state position on abortion. A Supreme Court decision on the fate of Roe v Wade is expected within three months.
What student borrowers think…
If you want to let me down, let me down gently. Yesterday Biden said he was considering canceling student loan debt… but not expecting $50,000 apiece. There are 43 million federal student loan borrowers. And an estimated 85% of young Americans want the government to act. During the campaign trail, Biden promised to clear $10,000. But he faces pressure from the Dems to raise the check. Instead, Biden deferred student loan repayments until the end of August. Now he says he is carefully considering whether there will be some kind of additional forgiveness. And could give Americans an answer within weeks. Meanwhile, Republicans are criticizing Biden for even considering more forgiveness. Sen. Mitt Romney (UT) called it a “bribe” ahead of midterm exams.
What the FDA is trying to eradicate…
Menthol cigarettes. Yesterday, the agency announced a plan to ban the last remaining flavor from the US market (other than tobacco). In 2009, the FDA banned all flavors except menthol and tobacco. At the time, some members of the Congressional Black Caucus opposed it. In fact, more than 80% of black smokers in the United States use menthol products, compared to 30% of white smokers. But now that has changed, with many backing the public health initiative. The news comes as smoking remains the leading cause of preventable death in the United States, killing more than 480,000 people each year. If passed, the ban could also help reduce heart disease, cancer and strokes.
What doesn’t feel first…
Amazon. Yesterday the company posted its slowest quarterly growth in years and its first quarterly loss since 2015, highlighting issues including supply chain issues and inflation. Amazon also lost $7.6 billion on its investment in Rivian, an electric car company. Now Amazon is warning that there could still be more losses to come. The news sent its shares plummeting nearly 10% in after-hours trading.
Why #sports Slack is exploding…
The NFL Draft. Yesterday was the first day teams started picking new players. The Jacksonville Jaguars selected defensive end Travon Walker as their first overall pick. The Detroit Lions picked Michigan’s Aidan Hutchinson as No. 2 – causing sports commentators to say: “It’s okay, I thought Hutchinson was going to be No. 1.” Kenny Pickett was the first QB to be Pick-etted. And the Tennessee Titans traded star receiver AJ Brown to the Philadelphia Eagles. Because, surprise.
Who says ‘kara-okay bye now’…
Skimmed by Rashaan Ayesh, Melanie De Lima, Mariza Smajlaj and Julie Shain