WASHINGTON — The nation’s economy slowed sharply last quarter to a 1.6% annual pace in the face of high interest rates, but consumers — the main driver of economic growth — kept spending at a solid pace.

Thursday’s report from the Commerce Department said the gross domestic product — the economy’s total output of goods and services — decelerated in the January-March quarter from its brisk 3.4% growth rate in the final three months of 2023.

A surge in imports, which are subtracted from GDP, reduced first-quarter growth by nearly 1 percentage point. Growth was also held back by businesses reducing their inventories. Both those categories tend to fluctuate sharply from quarter to quarter.

By contrast, the core components of the economy still appear sturdy. Along with households, businesses helped drive the economy last quarter with a strong pace of investment.

The import and inventory numbers can be volatile, so “there is still a lot of positive underlying momentum,” said Paul Ashworth, chief North America economist at Capital Economics.

The economy, though, is still creating price pressures, a continuing source of concern for the Federal Reserve. A measure of inflation in Friday’s report accelerated to a 3.4% annual rate from January through March, up from 1.8% in the last three months of 2023 and the biggest increase in a year. Excluding volatile food and energy prices, so-called core inflation rose at a 3.7% rate, up from 2% in fourth-quarter 2023.

From January through March, consumer spending rose at a 2.5% annual rate, a solid pace though down from a rate of more than 3% in each of the previous two quarters. Americans’ spending on services — everything from movie tickets and restaurant meals to airline fares and doctors’ visits — rose 4%, the fastest such pace since mid-2021.

But they cut back spending on goods such as appliances and furniture. Spending on that category fell 0.1%, the first such drop since the summer of 2022.

The state of the U.S. economy has seized Americans’ attention as the election season has intensified. Although inflation has slowed sharply from a peak of 9.1% in 2022, prices remain well above their pre-pandemic levels.

Republican critics of President Joe Biden have sought to pin responsibility for high prices on Biden and use it as a cudgel to derail his re-election bid. And polls show that despite the healthy job market, a near-record-high stock market and the sharp pullback in inflation, many Americans blame Biden for high prices.

Last quarter’s GDP snapped a streak of six straight quarters of at least 2% annual growth. The 1.6% rate of expansion was also the slowest since the economy actually shrank in the first and second quarters of 2022.

The economy’s gradual slowdown reflects, in large part, the much higher borrowing rates for home and auto loans, credit cards and many business loans that have resulted from the 11 interest rate hikes the Fed imposed in its drive to tame inflation.

Even so, the United States has continued to outpace the rest of the world’s advanced economies. The International Monetary Fund has projected that the world’s largest economy will grow 2.7% for all of 2024, up from 2.5% last year and more than double the growth the IMF expects this year for Germany, France, Italy, Japan, the United Kingdom and Canada.

Businesses have been pouring money into factories, warehouses and other buildings, encouraged by federal incentives to manufacture computer chips and green technology in the United States. On the other hand, their spending on equipment has been weak. And as imports outpace exports, international trade is also thought to have been a drag on the economy’s first-quarter growth.

Kristalina Georgieva, the IMF’s managing director, cautioned last week that the “flipside″ of strong U.S. economic growth was that it was “taking longer than expected” for inflation to reach the Fed’s 2% target, although price pressures have sharply slowed from their mid-2022 peak.

Inflation flared up in the spring of 2021 as the economy rebounded with unexpected speed from the COVID-19 recession, causing severe supply shortages. Russia’s invasion of Ukraine in February 2022 made things significantly worse by inflating prices for the energy and grains the world depends on.

The Fed responded by aggressively raising its benchmark rate between March 2022 and July 2023. Despite widespread predictions of a recession, the economy has proved unexpectedly durable. Hiring so far this year is even stronger than it was in 2023. And unemployment has remained below 4% for 26 straight months, the longest such streak since the 1960s.

Inflation, the main source of Americans’ discontent about the economy, has slowed from 9.1% in June 2022 to 3.5%. But progress has stalled lately.

Though the Fed’s policymakers signaled last month that they expect to cut rates three times this year, they have lately signaled that they’re in no hurry to reduce rates in the face of continued inflationary pressure. Now, a majority of Wall Street traders don’t expect them to start until the Fed’s September meeting, according to the CME FedWatch tool.
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«Враховуючи послаблення фактичного й очікуваного цінового тиску, а також зниження ризиків для надходження міжнародної фінансової підтримки, Національний банк продовжує цикл пом’якшення процентної політики»
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Раніше про зустріч із Гантом повідомив президент Володимир Зеленський
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Paytm, a popular payment app in India, faces government restrictions on business because of its Chinese connections, local media say. India is ramping up scrutiny and restrictions on other Chinese tech companies, too, amid concerns about security and geopolitics. Henry Wilkins has the story from Mumbai.
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У БЕБ розповіли, що у цій справі детективи аналізують понад 5 мільйонів банківських транзакцій
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На кінець 2023 року їхня вартість «на 1,7 мільярда швейцарських франків менше, ніж цифра, повідомлена за грудень 2022 року»
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«Українці вже придбали через Дію понад 4 мільйони облігацій і заробили на цьому більш ніж 94 мільйони гривень»
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Washington — U.S. officials are considering a request from Vietnam to be removed from a list of “nonmarket” economies, a step that would foster improved diplomatic relations with a potential ally in Asia but would anger some U.S. lawmakers and manufacturing firms.

The Southeast Asian country is on the list of 12 nations identified by the U.S. as nonmarket economies, which also includes China and Russia because of strong state intervention in their economies.  

Analysts believe Hanoi is hoping for a decision before the November U.S. election, which could mean a return to power of Donald Trump, who during his previous term as president threatened to boost tariffs on Vietnam because of its large trade surplus with the United States.

Under the Trump administration, the Department of Treasury also put Vietnam on a list of currency manipulators, which can lead to being excluded from U.S. government procurement contracts or other remedial actions. The Treasury, under the Biden administration, removed Vietnam from this list.

On the eve of President Joe Biden’s September visit to Hanoi, where he and Vietnamese Secretary-General Nguyen Phu Trong elevated the U.S.-Vietnam relationship to a comprehensive strategic partnership.

Vietnam formally asked U.S. Department of Commerce to remove it from the list of nonmarket economies on the grounds that it had made economic reforms in recent years.  

The Biden administration subsequently initiated a review of Vietnam’s nonmarket economy (NME) status. The Department of Commerce is to issue a final decision by July 26, 270 days after initiating the review.  

“Receiving market economy status is the highest diplomatic priority of the Vietnamese leadership this year, especially after last fall’s double upgrade in diplomatic relations,” said Zachary Abuza, a professor at National War College where he focuses on Southeast Asian politics and security issues.

He told VOA Vietnamese that the Vietnamese “are really linking the implementation of the joint vision statement to receiving that status.”

The U.S. is Vietnam’s most important export market with two-way trade totaling more than $125 billion in 2023, according to U.S. Census data. But Washington has initiated more trade defense investigations with Vietnam than with any other country, mainly anti-dumping investigations. Vietnam recorded 58 cases subject to trade remedies of the U.S. as of August 2023, in which 26 were anti-dumping, according to the Vietnam Trade Office in the U.S.

Vietnam has engaged a lobbying firm in Washington to help it win congressional support for a status upgrade. A Foreign Agents Registration Act’s statement filed to the U.S. Department of Justice shows that Washington-based Steptoe is assisting the Vietnamese Ministry of Industry and Trade and supporting the Vietnamese government in “obtaining market economy status in antidumping proceedings.”

“I understand why Vietnamese are lobbying,” said Murray Hiebert, a senior associate of the Southeast Asia Program at the Center for Strategic and International Studies (CSIS).

“One reason is U.S.-Vietnam relations have come so far, and to hold the non-market [status] is a little bit disingenuous because most of the countries that have this status are countries like China, Russia, North Korea, who are not so friendly with the United States. So I think [the U.S. recognition of Vietnam as a market economy] would be a sign that relations have improved.”

US election key

Both Abuza and Hiebert believe that Vietnam is pushing hard to secure the upgrade before the November U.S. election that could bring Trump back into office.

“Trump began an investigation of Vietnam’s dumping just before the end of his administration. He may again start that process,” said Hiebert, who was senior director for Southeast Asia at the U.S. Chamber of Commerce before joining CSIS.

But Vietnam’s campaign faces opposition from within the U.S.

More than 30 U.S. lawmakers in January sent joint letters to U.S. Secretary of Commerce Gina Raimondo urging the Biden administration not to grant market economy status to Vietnam. They argued that Vietnam did not meet the procedural requirements for a change of status and that granting Hanoi’s wish would be “a serious mistake.”

The U.S. designated Vietnam as a nonmarket economy in 2002 during an anti-dumping investigation into Vietnamese catfish exports. Over the past 21 years, the U.S. has imposed anti-dumping duties on many Vietnamese exports, including agricultural and industrial products.

In a request sent to Raimondo to initiate a changed circumstances review, the Vietnamese Ministry of Industry and Trade said that over the past 20 years, the economy of Vietnam “has been through dramatic developments and reforms.” It said 72 countries recognize Vietnam as a market economy, notably the U.K., Canada, Australia and Japan.

‘Unfairly traded Chinese goods’

U.S. manufacturing groups have expressed opposition to Vietnam’s request, arguing that Vietnam continues to operate as a nonmarket economy. In comments sent to Raimondo, the Alliance for American Manufacturing (AMM) said that Vietnam “cannot reasonably be understood to demonstrate the characteristics of a market economy.”

“There’s still heavy intervention by the governing Communist Party [of Vietnam],” said Scott Paul, president of AMM. “There’s a lot of indication that China may be using Vietnam as a platform to also export to the U.S., which is obviously concerning to firms here,” he said.

In a letter dated January 28, eight senators wrote “Granting Vietnam market economy status before it addresses its clear nonmarket behavior and the severe deficiencies in its labor law will worsen ongoing trade distortions, erode the U.S. manufacturing base, threaten American workers and industries, and reinforce Vietnam’s role as a conduit for goods produced in China with forced labor.”  

Many Chinese products have been found to be disguised or labeled as “Made in Vietnam” to avoid U.S. tariffs since Trump launched a trade war with China in 2018. Vietnam has promised to crack down on the practice.

Abuza pointed out what he called a contradiction in U.S. policy.

“Vietnam is too important to the United States economically in terms of trade and foreign direct investment, and we cannot look to Vietnam for supply chain diversification out of China if it doesn’t have market economy status.”

Hiebert said the U.S. “should do this and get moving” as Vietnam is “one of the U.S.’ best friends in Asia and Southeast Asia and help stand up to China.”
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The U.S. economy is always a major factor in the presidential campaign because the president plays a key role in setting and shaping trade and economic policies. VOA’s Senior Washington Correspondent Carolyn Presutti reports on how the economy is doing and the difference between how the two presidential contenders would handle it. Camera: Mike Burke
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За даними уряду, від початку повномасштабної війни обсяг наданих інвестицій ЄІБ склав більше 2 мільярдів євро
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The Chinese-operated online markets Temu and Shein are shaking up e-commerce with their extremely low prices. But the firms are facing concerns from consumers and Congress. Evie Steele has the story from Washington.
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Національний банк України опівдні встановив довідкове значення курсу на рівні 39 гривень 77,16 копійки за долар, це на 17 копійок більше за офіційний курс на 19 квітня
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«Ми отримали запевнення в підтримці законопроектів обома партіями. Очікуємо, що найближчим часом цей великий пакет допомоги буде проголосовано»
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«Ми впевнені, що цю потребу буде задоволено»
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«Ми вітаємо пропозиції ЄС щодо спрямування надзвичайних надходжень від суверенних заморожених активів Росії на користь України»
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SCRANTON, Pa. — President Joe Biden is calling for a tripling of tariffs on steel from China to protect American producers from a flood of cheap imports, an announcement he planned to roll out Wednesday in an address to steelworkers in the battleground state of Pennsylvania.

The move reflects the intersection of Biden’s international trade policy with his efforts to court voters in a state that is likely to play a pivotal role in deciding November’s election.

The White House insists, however, that it is more about shielding American manufacturing from unfair trade practices overseas than firing up a union audience.

In addition to boosting steel tariffs, Biden also will seek to triple levies on Chinese aluminum. The current rate is 7.5% for both metals. The administration also promised to pursue anti-dumping investigations against countries and importers that try to saturate existing markets with Chinese steel, and said it was working with Mexico to ensure that Chinese companies can’t circumvent the tariffs by shipping steel there for subsequent export to the U.S.

“The president understands we must invest in American manufacturing. But we also have to protect those investments and those workers from unfair exports associated with China’s industrial overcapacity,” White House National Economic Adviser Lael Brainard said on a call with reporters.

Biden was set to announce that he is asking the U.S. Trade Representative to consider tripling the tariffs during a visit to United Steelworkers union headquarters in Pittsburgh. The president is on a three-day Pennsylvania swing that began in Scranton on Tuesday and will include a visit to Philadelphia on Thursday.

The administration says China is distorting markets and eroding competition by unfairly flooding the market with below-market-cost steel.

“China’s policy-driven overcapacity poses a serious risk to the future of the American steel and aluminum industry,” Brainard said. Referencing China’s economic downturn, she added that Beijing “cannot export its way to recovery.”

“China is simply too big to play by its own rules,” Brainard said.

Higher tariffs can carry major economic risks. Steel and aluminum could become more expensive, possibly increasing the costs of cars, construction materials and other key goods for U.S. consumers.

Inflation has already been a drag on Biden’s political fortunes, and his turn toward protectionism echoes the playbook of his predecessor and opponent in this fall’s election, Donald Trump.

The former president imposed broader tariffs on Chinse goods during his administration, and has threatened to increase levies on Chinese goods unless they trade on his preferred terms as he campaigns for a second term. An outside analysis by the consultancy Oxford Economics has suggested that implementing the tariffs Trump has proposed could hurt the overall U.S. economy.

Senior Biden administration officials said that, unlike the Trump administration, they were seeking a “strategic and balanced” approach to new tariff rates. China produces around half of the world’s steel, and is already making far more than its domestic market needs. It sells steel on the world market for less than half what U.S.-produced steel costs, the officials said.

Biden’s announcement follows his administration’s efforts to provide up to $6.6 billion so that a Taiwanese semiconductor giant can expand facilities that it is already building in Arizona and better ensure that the world’s most-advanced microchips are produced in the U.S. That move could be seen as working to better compete with China chip manufacturers.

Treasury Secretary Janet Yellen, during a recent visit to China, warned against oversaturating the market with cheap goods, and said low-cost steel had “decimated industries across the world and in the United States.” The Chinese, in turn, expressed grave concern over American trade and economic measures that restrict China, according to the China’s official news agency. U.S. Secretary of State Anthony Blinken also has an upcoming visit to China.

Also potentially shaking up the steel industry is Japanese Nippon Steel’s proposed acquisition of Pittsburgh-based U.S. Steel. Biden said last month that he opposed the move.

“U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated,” Biden said then.

At a rally last weekend in Pennsylvania, Trump tore into Biden over Nippon Steel’s efforts to buy U.S. Steel, ignoring the president’s objections to the merger.

“I would not let that deal go through,” Trump said.
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За словами Шмигаля, основною передумовою для покращення івестиційного клімату є надання Україні додаткових систем ППО
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Harare, Zimbabwe — Zimbabwe’s recently introduced gold-backed currency is sliding on the local black market but officials insist the currency is getting stronger and has a bright future. Columbus Mavhunga reports from Harare.

Even songs are played on the radio encouraging citizens to embrace the currency, called Zimbabwe Gold — or ZiG — introduced on April 5 trading at 13.56 to the U.S. dollar.

Official statistics say ZiG is now trading at 13.41. But on the black market it is around 20.

Chamunorwa Musengi, a street vendor in Harare, is not optimistic about the new currency which for the moment is trading electronically, with notes and coins coming into circulation on April 30:  

“Let’s wait and see,” he said. “Maybe it will boost our economy for some time. But I do not see anything changing with the new currency, because things are really tight at the moment. We been through this before. When they introduced bond notes, things stabilized for a short time and then it started sliding on the market. They are saying ZiG is around 13 — it will end up around 40,000 against the dollar.”

Bond notes refer to the currency which was launched in 2019 after a decade of Zimbabwe using the U.S. dollar and other currencies.  The bond note had lost about 80% of its value and was trading at around 40,000 to the dollar before its official demise.

Samson Kabwe, a minibus conductor, says he cannot wait for the physical notes and coins of ZiG to be released.

“We are for ZiG, especially for change,” he said. “We had no small notes for change. If ZiG notes and coins come, the government would have done a great thing. We want it like now.”

The government says for now, commodities like fuel will still be bought and sold using U.S. dollars. 

Gift Mugano, an economics professor, predicts the new currency will go the way of the abandoned one.

“[In] 2016, we introduced bond notes which was backed by Afreximbank (African Export–Import Bank) facility of $400 million,” he said. “The Afreximbank is an international bank with reputation. But that was not be sufficient to guarantee the success of the bond notes. So it failed. Right? Why are we failing to guarantee stability? There is no sustained production in the economy because you defend the economy with production. Secondly, confidence issues. People do not trust this system because we have lost money several times.”

But John Mushayavanhu, the new governor or the Reserve Bank of Zimbabwe, predicts the currency will succeed because it is backed by reserves of gold and other minerals worth $175 million and $100 million cash.   

“We are doing what we are doing to ensure that our local currency does not die,” he said. “We were already in a situation where almost 85% of transactions are being conducted in U.S. dollars because [the] local currency was not living up to the function of store of value. We are going to restore that store of value so that we can start reviving our currency. So, we are starting at $80 million worth, and as we get more reserves, we will gradually be moving towards greater use of the local currency. It is my wish that if we get to the year (end) at 70-30, next year 60-40, the year after 50-50; by the time we get to 50-50 people will be indifferent as to which currency they are using. And that way we regain use of our local currency.”

While Mushayavanhu has that confidence, social media is awash with people and traders — including government departments — refusing to accept the outgoing Zimbabwe currency.
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Національний банк України опівдні встановив довідкове значення курсу на рівні 39 гривень 57,88 копійки за долар, це майже не відрізняється від офіційного курсу на 16 квітня
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Національний банк України близько 12:30 встановив довідкове значення курсу на рівні 39 гривень 50,94 копійки за долар – це на 11 копійок більше за офіційний курс на 15 квітня
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Як пояснили в уряді, втілення єдиної інформаційної політики є «пріоритетним питанням національної безпеки»
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