The US’s GDP just shrunk for the first time in two years.
We’re fine. If we’re gonna be sad we’re gonna do it with increased consumer spending. Let’s take it back. The US’s GDP — which measures the value of goods and services produced — has been on the up and up since its drop at the beginning of the pandemic. Last year, the economy experienced the fastest growth since the ‘80s. But yesterday, the Commerce Dept reported that GDP dropped 1.4% in the first three months of this year.
A bunch of reasons — from rising COVID-19 cases to inflation to the war in Ukraine. But the biggest takeaway is the US is dealing with a trade deficit. Basically, Americans imported more products than they exported. But thanks to higher wages and a strong job market, they still added to cart and swiped their cards…music to economists’ ears. Many looked at yesterday’s news and shrugged off warnings of a recession.
Tell that to Bank of America and Deutsche Bank. They say a recession could come as soon as next year. But high consumer spending is a sign of strong economic health. And many think GDP itself could jump next quarter — even if the Federal Reserve raises interest rates as expected. Meanwhile inflation has Dems stressing. Because that's a talker no majority party wants in an election year.
Dear Econ 101, we forgive you but can’t forget you. From COVID-19 to inflation, the economy’s giving us whiplash. But many say it’s not time to start panicking just yet.
PS: We’ve got tips on how to manage the economy’s ups and downs.
Welcome to our series on abortion rights and restrictions. theSkimm is tracking state actions in the lead-up to a landmark Supreme Court decision expected by July. Here’s the latest…
Yesterday, Oklahoma’s 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 incentivizes citizens to sue anyone who performs or helps someone get an abortion. Gov. Kevin Stitt (R) is expected to sign it.
The move comes weeks after the governor signed another anti-abortion bill, this one making it a felony to perform the procedure, punishable by up to 10 years in prison. Since January, hundreds of abortion restrictions have been intro'd in more than 40 states.
If you’re gonna let me down, let me down gently. Yesterday, Biden said he's considering forgiving student loan debt…but not to expect $50,000 per person. There are 43 million federal student loan borrowers. And an estimated 85% of young Americans want the gov to take action. On the campaign trail, Biden promised to erase $10,000. But he’s facing pressure from Dems to bump up the check. Instead, Biden has postponed student loan payments until the end of August. Now, he says he’s taking a “hard look” at whether there will be any sort of additional forgiveness. And could be giving Americans an answer within weeks. Meanwhile, Republicans are criticizing Biden for even considering more forgiveness. Sen. Mitt Romney (UT) called it a “bribe” in the lead-up to midterms.
Menthol cigarettes. Yesterday, the agency announced a plan to ban the last remaining flavor in the US market (other than tobacco). In 2009, the FDA banned all flavors but menthol and tobacco. At the time, some in the Congressional Black Caucus opposed it. That’s because over 80% of Black smokers in the US use menthol products — compared to 30% of white smokers. But now, that's changed, with many supporting the public health initiative. The news comes as smoking remains the leading cause of preventable death in the US, killing more than 480,000 people each year. If it goes through, the ban could also help reduce heart disease, cancer, and stroke.
Amazon. Yesterday, the company posted its slowest quarterly growth in years and its first quarterly loss since 2015. Pointing to things like supply chain issues and inflation. Amazon also lost $7.6 billion on its investment in Rivian, an electric car company. Now, Amazon warns there could still be more loss ahead. The news caused its shares to drop nearly 10% in after-hours trading.
The NFL Draft. Yesterday was the first day that teams started picking new players. The Jacksonville Jaguars tapped defensive end Travon Walker as the No. 1 overall pick. The Detroit Lions took Michigan’s Aidan Hutchinson as No. 2 — making sportscasters say, ‘that's ok I thought Hutchinson was gonna 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.
Skimm’d by Rashaan Ayesh, Melanie De Lima, Mariza Smajlaj, and Julie Shain
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