Market Beats | US Economy Shrinks for First Time Since 2022 as Pre-Tariff Imports Soar; 30,000 New Yorkers Moved to Florida; Prada Beats Expectations on Miu Miu Growth, Buys Versace for $1.4 Billion

—— US Economy Shrinks for First Time Since 2022 as Pre-Tariff Imports Soar; 30,000 New Yorkers Moved to Florida; Prada Beats Expectations on Miu Miu Growth, Buys Versace for $1.4 Billion

1. US Economy Shrinks for First Time Since 2022 as Pre-Tariff Imports Soar

The US economy contracted in the first quarter of 2025 for the first time since 2022, driven by a massive surge in imports ahead of new tariffs and weakening consumer spending — early signs of President Donald Trump’s trade policies taking hold.

Inflation-adjusted gross domestic product fell at an annualized rate of 0.3%, according to the Commerce Department’s preliminary estimate released Wednesday. That compares with average growth of about 3% over the previous two years. Net exports subtracted nearly 5 percentage points from GDP, the most on record, the Bureau of Economic Analysis said.

Consumer spending, which makes up two-thirds of the economy, rose at just a 1.8% pace — the slowest since mid-2023. The only bright spot came from business investment in equipment, which saw its strongest gain since 2020, driven by purchases of aircraft and computers.

The data underscores how companies rushed to secure goods before expansive tariffs took effect. Looking ahead, economists warn that the new duties will likely trigger a supply shock, squeezing businesses and curbing demand as higher prices stretch household budgets.

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2. 30,000 New Yorkers Moved to Florida

A net 30,000 residents left New York City for Florida’s Palm Beach and Miami-Dade counties over the five years through 2022, taking with them a total of $9.2 billion in income, according to a new report from the nonpartisan Citizens Budget Commission.

The two Florida counties attracted high-earning households. About 20,000 individuals moved to Palm Beach with an average per capita income of $190,000, while over 26,000 relocated to Miami-Dade with an average per capita income of $266,000, the report said.

The pandemic, rising cost of living, and quality-of-life issues have made other parts of the US more appealing to some New Yorkers. States like New Jersey, Florida, California, and Pennsylvania all gained residents from New York during the period studied, the report found.

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3. Prada Beats Expectations on Miu Miu Growth

Prada SpA posted better-than-expected sales for the first quarter of 2025, defying a broader luxury slowdown thanks to a 60% surge in retail sales at its youthful Miu Miu brand.

Group net revenue rose 13% at constant currencies, just ahead of analyst forecasts, the Hong Kong-listed company said Wednesday. Miu Miu’s popularity among younger shoppers helped offset weakening global demand for luxury goods amid economic uncertainty and rising trade tensions.

The Italian fashion house aims to grow faster than the industry this year, even as it anticipates a “complex” macroeconomic environment. Prada shares are down about 20% year to date.

By contrast, LVMH, Hermès, and Kering’s Gucci brand all reported disappointing results this month, citing sluggish demand in China and the US.

Prada reported growth across all markets, led by Japan and the Middle East.

The company also announced it will acquire Versace for €1.25 billion ($1.4 billion), marking the largest deal in its 112-year history. The acquisition adds a bold, distinctive brand to Prada’s portfolio and is expected to enhance its competitive positioning against larger luxury rivals.

While analysts welcomed the move, attention will turn to how Prada plans to revive and integrate Versace.

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4. White House Slams Amazon Over Plan to Display Trump’s Tariff Costs

Hiring at US companies slowed to the weakest pace in nine months in April, highlighting growing hesitation among employers amid economic uncertainty.

Private-sector payrolls rose by just 62,000, according to ADP Research, missing all estimates in a Bloomberg survey of economists. Job losses were seen across several key sectors, including education and health services, information, and professional and business services.

“Unease is the word of the day,” said Nela Richardson, chief economist at ADP. “Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data. It can be difficult to make hiring decisions in such an environment.”

The report adds to a mixed view of the labor market. Despite the hiring slowdown, jobless claims remain near pre-pandemic levels, suggesting layoffs have not spiked.

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5. Starbucks Misses Expectations as Sales Drop, Piling Pressure on New CEO

Starbucks Corp.’s CEO said the company is making strides in reigniting growth, but disappointing quarterly sales and a sluggish economy are intensifying pressure on its new leadership.

Same-store sales fell 1% in the quarter ended March 30, missing Wall Street expectations. Earnings per share also came in below forecasts.

“I’d be remiss if I don’t first just mention the hard fact in front of us, which is our Q2 2025 financial results were disappointing,” said CEO Brian Niccol. “The thing I want you to know is behind the scenes, we really are showing a lot of signs of progress.”

Niccol, who took over in September, launched a revamp of Starbucks cafes to make them more inviting and to reaccelerate growth. The company has faced headwinds from price hikes, long wait times, and consumer backlash over its perceived stance on the Middle East conflict.

Shares dropped 11% at 9:31 a.m. in New York. As of Tuesday’s close, the stock had fallen 7% this year, underperforming the S&P 500 Index.

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6. US Supply Chains Face Looming Crisis as Trump’s Tariffs Take Hold

President Donald Trump’s sweeping tariffs on Chinese goods, raised to 145% in early April, have already triggered a sharp decline in cargo shipments — by as much as 60% according to some estimates. While American consumers have yet to feel the full impact, shortages and higher prices are imminent.

By mid-May, retailers such as Walmart Inc. and Target Corp. are warning of empty shelves and price hikes as inventories deplete. Apollo Management’s chief economist Torsten Slok has likened the situation to “Covid-like” shortages, predicting significant layoffs in trucking, logistics, and retail sectors.

Though Trump has recently signaled some willingness to adjust tariffs, experts warn it may be too late to prevent a supply shock that could affect the US economy through the holiday season.

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7. US Mortgage Rates See Biggest Weekly Jump in a Year, Threatening Spring Home Sales

US mortgage rates rose for the first time in four weeks, posting the largest weekly gain since April 2024 and threatening to cool the housing market during the crucial spring buying season.

The average rate for a 30-year fixed loan climbed to 6.83% from 6.62% the previous week, Freddie Mac said in a statement Thursday.

The surge comes as global tariff tensions — particularly between the US and China — have rattled equity markets and pushed up yields on 10-year US Treasuries, which serve as a benchmark for mortgage pricing.

“When [the 10-year yield] rises, mortgage rates typically follow suit,” said Jiayi Xu, an economist at Realtor.com. “Looking forward, competing economic forces are pulling mortgage rates in opposite directions, making it increasingly difficult to predict where they’ll land.”

Demand is already showing signs of weakening. According to data from Redfin Corp., home-purchase contracts in the four weeks ending April 13 fell 0.8% from a year earlier.

“Consumers are feeling anxious about the economy and the rising cost of living, potentially leading them to adopt a ‘wait-and-see’ approach regarding significant purchases like homes,” said Kara Ng, senior economist at Zillow Home Loans.

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