From plunging consumer confidence to downgraded forecasts, concerns have been mounting regarding the negative impact of Trump’s tariffs on U.S. economic growth.

Released this morning, the preliminary estimate for first quarter GDP growth in the U.S. suggests the concerns are valid.

At -0.3% (annualized), real GDP growth in the U.S. contracted in the first quarter and was down sharply from the previous quarter’s pace of +2.4%. This was the first quarterly contraction since early 2022.

The primary reason for the slowdown was a surge in imports (which subtract from GDP) linked to U.S. buyers looking to get ahead of the tariffs announced, but not yet implemented, in the first quarter.

Consumer spending did better than expected in the first quarter but the consumer confidence data suggest this could go the other way as we get deeper into the year.

Canadian GDP data for the month of February also came out this morning, showing that real output was down by 0.2% compared to January.

Lower output in the mining, quarrying, and oil and gas extraction sector and the construction sector contributed the most to the monthly decline.

Based on Statistics Canada’s “flash” estimate for output in March of +0.1%, the annualized growth rate for the first quarter will come in around 1.5%. The Q1 growth likely reflects a temporary export surge to the U.S. to get ahead of tariffs.

As with the U.S. data, although some tariffs and countertariffs were in effect in March,  the actual impact of the tariff charges will become more evident as we get the numbers for the second quarter when more tariffs were in effect.

Answer to the previous trivia question: Including the newly-elected Liberal minority government under Mark Carney, there have been six minority governments at the federal level in Canada since 2004 (one under Paul Martin; two under Stephen Harper; two under Justin Trudeau; and the new one under Mark Carney).

Today’s trivia question: What adhesive product was first issued on May 1, 1840 (though oddly not valid for use until May 6)?