- May 15, 2025
- Posted by: Melanie Scott
- Category: Market News
The UK economy grew more than expected in March, with monthly GDP up 0.2% and quarterly growth revised higher to 0.7% (vs. 0.6% forecast). The expansion was driven by stronger consumer spending and increased business investment. However, this growth reflects activity before the implementation of new U.S. tariffs and UK tax increases in April, so it’s possible that momentum may not carry into the coming months.
US data today suggests that the pre-emptive tariff shopping sprees from March quickly declined in April, and companies are choosing to absorb some of the higher tariff-related costs for now. Core retail sales (excludes automobile industry) increased just 0.1% in April, lower than 0.3% forecast and a significant drop from March’s 0.8% growth. Adjusting for inflation, this probably means real consumer spending shrank. PPI month over month surprisingly dropped 0.5%, much worse than 0.2% growth prediction. Year-over-year price growth is slowing, which indicates businesses are currently absorbing higher costs instead of raising prices. Unemployment claims met expectations and held steady at 229K, matching the previous week’s claims. Today’s data shows signs of slowing down, which could give the Federal Reserve room to cut interest rates later this year.
Manufacturing sentiment remains subdued across key regions. In New York, the Empire State Manufacturing Index registered -9.2, slightly weaker than the expected -8.2. While there was some improvement in new orders and shipments, employment and pricing components remained under pressure. Firms remain generally pessimistic about future conditions.
In Philadelphia, the general activity index improved from -26.4 to -4.0, better than the forecast of -11.0. Despite remaining in negative territory, the uptick suggests early signs of stabilization, with expectations for future growth becoming more widespread. Altogether, today’s data paints a picture of slowing economic activity, which may give the Federal Reserve more flexibility to cut interest rates later this year.
As Canada heads into the long weekend, please note that Bendix will be closed on Monday, May 19, though our online platform will remain fully operational for your transfer needs.
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