Global brokerages and economists have warned of an impending US recession after factoring in the impact of reciprocal tariffs announced by the Donald Trump administration.
JP Morgan Chase & Co expect real GDP to contract under the weight of the tariffs, and for the full year they look for real GDP growth of -0.3 per cent, down from 1.3 per cent previously.
The bank’s chief US economist, Michael Feroli, said that the forecast contraction in economic activity is expected to depress hiring and, over time, to lift the unemployment rate to 5.3 per cent.
Citi economists have cut their forecast for growth this year to just 0.1 percent, while UBS economists reduced their forecast to a mere 0.4 per cent.
UBS Chief US Economist Jonathan Pingle said that they expect US imports from the rest of the world to fall more than 20 per cent over our forecast horizon, mostly in the next several quarters, bringing imports as a share of GDP back to pre-1986 levels.