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--:-- Layla: Americans are increasingly worried that a recession is coming. I just feel like the best thing to do is to save and then try to stay calm. We're all sort of in the same boat. Where is the U.S. economy headed in the next 100 days? I'm Leila Faldin, that's Michelle Martin, and this is Up First from NPR News.
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--:-- Leila Faldin: Ukraine has agreed to a deal with the U.S. to jointly invest in Ukraine's minerals and other natural resources. The agreement is designed as a win-win partnership, which gives us hope that such an agreement will actually be implemented in the long run.
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--:-- Leila Faldin: But does it include security guarantees against Russia? And soldiers are exchanging daily gunfire along the border of India and Pakistan as tensions between the countries threaten to boil over. Stay with us. We'll give you the news you need to start your day.
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--:-- Leila Faldin: When it comes to steering the U.S. economy, the Trump administration has had a rocky first 100 days. Economic output shrank during the first three months of the year. And we asked Americans how it feels to hear that news.
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--:-- Jeremy Rice: So first we had the housing crisis, then we had COVID. So we look at this as like the next battle.
--:-- Leila Faldin: His shop sells faux flowers, mainly shipped from China. The business is not recession-proof.
--:-- Cindy Ayers Elliott: It's not just automotive parts. It's also food and fertilizer and gas that you use to fuel your equipment. If it costs me more to produce, it's going to cost my neighbor or my client more to buy.
--:-- Maureen Hatfield: I manage on a limited budget but it tighter and tighter at the store. Like we all joke about the price of eggs but it really is ridiculous.
--:-- Leila Faldin: So what's in store for the next 100 days and beyond? NPR's Scott Horsley is with us now to talk about the economic outlook.
--:-- Scott Horsley: Good morning, Scott. Good morning.
--:-- Scott Horsley: So yesterday we learned that the U.S. economy contracted during the first quarter of the year. Is the second quarter looking any better? Not so far. The first quarter was all about people bracing for the president's trade war. April, which marks the start of the second quarter, is when those tariffs really started to bite. And that has rattled financial markets.
--:-- Scott Horsley: It's also made consumers nervous that prices are going to go up. Consumer spending has not dried up, but Chief Economist Greg Daco of EY Parthenon says people are being more careful about their spending, especially when it comes to things like eating out.
--:-- Greg Daco: We did see a bit of a step back in spending on restaurants and bars. And with income trends starting to cool quite significantly, that is an additional headwind for many families across the country in terms of their ability to spend on discretionary items.
--:-- Scott Horsley: As we know, consumer spending is the lifeblood of this economy. So when families start to cut back like that, it can really put the brakes on economic growth.
--:-- Scott Horsley: You know, in order to spend money, people usually have to make money. So how's the job market holding up? So far, the job market's been very resilient. Unemployment in March was just 4.2%. We're going to get the April jobs numbers tomorrow. Forecasters expect to see some slowdown in hiring.
--:-- Seth Lelavirat: I'm anxious about the prospect of being laid off from work. This is just the beginning. I'm like, there's going to be more.
--:-- Lelavirat: I'm also a little worried about the drop in my retirement savings. You know, the S&P 500 index is down about 7% since inauguration day. So I'm being more conservative about my own spending.
--:-- Lelavirat: That means no more stopping for coffee and pastries after swim practice every week. And he has put off a little home improvement project that he had been planning for this year.
--:-- Lelavirat: I just feel like the best thing to do is just save and then just try to stay calm. You know, we're all sort of in the same boat. Right now, that boat is getting tossed around a little bit by the economic headwind.
--:-- Scott Horsley: So it's no wonder, Michelle, some people are feeling a little seasick.
--:-- Michelle Martin: Yeah, how about that? You know, a lot of people say they're worried about a recession. Is that where we're headed? Not necessarily, although the risk of a recession has certainly increased since the president launched his trade war.
--:-- Scott Horsley: We've already seen a substantial slowdown in cargo traffic, especially from China, where those crippling tariffs are in effect.
--:-- Gene Sirocco: We're not going to put longshoremen and women out of work, but they'll probably get less hours because fewer containers are coming in. The truck drivers may not haul as many boxes every day as they do right now.
--:-- Scott Horsley: Global trade will slow prices will increase and it will impact jobs across America and the world.
--:-- Greg Daco: Now, whether we actually fall into recession could depend on whether Trump's tariffs remain in place or get watered down.
--:-- Scott Horsley: Even if the tariffs are rolled back, Daco warns, we're likely to be looking at fairly sluggish growth for the rest of this year.
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--:-- Leila Faldin: Ukraine and the U.S. have agreed to a deal. They will share profits from the sale of Ukraine's critical minerals and raw materials. Both sides are calling it a win. The deal is intended to give the White House an economic motive to keep investing in Ukraine's defense and reconstruction as the Trump administration tries to broker an end to the war.
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--:-- Joanna Kakissis: Hello Joanna Thanks for joining us once again Thanks for having me Michelle
--:-- Joanna Kakissis: So how will this economic agreement work So Ukraine economy minister Yulia Svatedenko she led Ukrainian negotiations on the deal and she said income would come from new licenses for critical minerals, things like graphite, titanium, lithium, as well as other natural resources.
--:-- Joanna Kakissis: And she noted that Ukraine and the U.S. will have equal voting rights over the investment fund, and that Ukraine would keep total control of its infrastructure and natural resources.
--:-- Joanna Kakissis: Now, U.S. mining companies are expected to make money, of course, as are other American companies if they end up being involved in Ukraine's reconstruction.
--:-- Joanna Kakissis: Now, this just all came together just a few hours ago as we are speaking now. But from what you understand, how are Ukrainians reacting to this deal?
--:-- Volodymyr Landa: I would describe their reaction as very guarded optimism.
--:-- Joanna Kakissis: We spoke to Volodymyr Landa, a senior economist with the Center for Economic Strategy in Kiev. He's been following the minerals negotiations closely for months, and he says this deal at least does not smack of colonialism.
--:-- Volodymyr Landa: The agreement is designed as a win-win partnership, which gives us hope that such an agreement will actually be implemented in the long run.
--:-- Joanna Kakissis: So unlike previous versions of the deal, Landis says this version does not obstruct Ukraine on its path to the European Union, and crucially, it appears to not count previous U.S. military aid to Ukraine as debt that needs to be repaid.
--:-- Joanna Kakissis: Does this mean that the Trump administration's relationship with Ukraine has improved?
--:-- Volodymyr Landa: Well, you know, some people here are sure hoping so because the relationship wasn't good to begin with.
--:-- Joanna Kakissis: You will recall that in late February, this minerals agreement stalled when Ukrainian President Volodymyr Zelenskyy visited the White House and President Trump and Vice President J.D. Vance publicly berated him for not being grateful enough for U.S. support.
--:-- Joanna Kakissis: Zelenskyy had refused to sign an early draft of the minerals deal because he said it would have left generations of Ukrainians deeply in debt while giving them very little in return, especially security guarantees so Russia does not invade Ukraine again.
--:-- Joanna Kakissis: And does this deal address any of those security guarantees?
--:-- Volodymyr Landa: So, Michelle, from what we know, it does not address them explicitly, though Ukrainians see the language coming out of the White House as a good sign.
--:-- Joanna Kakissis: For example, in a statement, Treasury Secretary Scott Besant said that the agreement shows Russia that this administration wants a free, sovereign and prosperous Ukraine.
--:-- Joanna Kakissis: And he added, quote, no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine.
--:-- Volodymyr Landa: So Volodymyr Landa, the economist we heard from earlier, he says he hopes this represents a thaw in the relationship.
--:-- Joanna Kakissis: The agreement could restore constructive relations between two countries by defining the format of further U.S. military and financial support to Ukraine.
--:-- Joanna Kakissis: Now, Ukraine says these security guarantees are crucial, especially as ceasefire talks continue. Meanwhile, Russia has unilaterally declared its own three-day ceasefire starting in a week to mark the Soviet Union's victory against Nazi Germany, but the Russians say they're in no hurry to come to the negotiating table.
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--:-- Leila Faldin: Tensions between India and Pakistan often run hot and cold, and now they're running hot after a militant attack killed 26 people in Indian-controlled Kashmir.
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--:-- Dia Hadid: Hello, Dia. Thanks for joining us once again.
--:-- Dia Hadid: So let's start here. What happened that led to this?
--:-- Dia Hadid: Well, last week, gunmen opened fire and tourists in a meadow that's in Indian-controlled Kashmir. It's a territory claimed by Pakistan and India, and both countries control parts of it.
--:-- Dia Hadid: But this attack was pretty harsh. Eyewitnesses reported that some gunmen asked their victims if they were Muslim, and if they weren't, they shot them So most of the killed were Hindu men and the attack felt visceral in this Hindu majority nation.
--:-- Dia Hadid: Praveen Dhanthi is from the International Crisis Group and he says that put pressure on India to respond The civilians you know 26 of them they belong to all parts of the country, and it's the first time such a big attack has been mounted on civilians.
--:-- Dia Hadid: So there is a lot of anger among the Indian public. They've been paying for blood right now. So there is pressure on India to respond with retaliatory strikes on Pakistan, but why is India blaming Pakistan for this attack?
--:-- Dia Hadid: Yeah, they're blaming Pakistan because the group that claim responsibility is seen as a proxy for the Pakistani army.
--:-- Dia Hadid: Now, Pakistan denies any connection and has called for a neutral investigation, but that hasn't mollified India.
--:-- Dia Hadid: It quickly announced it was withdrawing diplomats, it shut down a border crossing, and it suspended a water-sharing agreement that Pakistan sees as existential to its survival.
--:-- Dia Hadid: So Pakistan's announced similar measures and it's banned trade with India.
--:-- Dia Hadid: Has there been violence since the initial shootings?
--:-- Dia Hadid: Yeah, Michelle, like you mentioned earlier, there's been near daily exchanges of gunfire. Residents are fleeing the area on both sides.
--:-- Dia Hadid: Yesterday, Pakistan said it shot down two Indian drones. And overnight, it cancelled commercial flights to Himalayan areas that are close to Kashmir.
--:-- Dia Hadid: So analysts say it's now a waiting game. Like Milan Vaishnav, he's with the Carnegie Endowment.
--:-- Dia Hadid: There is enormous pressure on Prime Minister Modi to respond with some kind of military maneuver.
--:-- Dia Hadid: The nature of this attack crossed, I think, a threshold of brazenness that makes it politically difficult for Modi not to respond militarily.
--:-- Dia Hadid: The problem is, though, it could spin out of control. Both these countries have nuclear weapons.
--:-- Dia Hadid: Now, the US Secretary of State, Marco Rubio, has been calling on both sides to de-escalate. Is there any chance of that, any sign of that happening?
--:-- Dia Hadid: Yeah, there could be. But you see, analysts say this is part of the problem in South Asia.
--:-- Dia Hadid: There's a pattern of India and Pakistan escalating and then waiting for outsiders to de-escalate the crisis.
--:-- Dia Hadid: One Pakistani columnist, Arif Anwar, recently wrote about this. India and Pakistan don't just walk into a war by accident. There is this entire expectation that somebody is going to talk us off the ledge.
--:-- Dia Hadid: The talking off the ledge is the responsibility of the international community.
--:-- Dia Hadid: So now we're waiting to see if Rubio can talk Pakistan and India off the ledge.
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--:-- Leila Faldin: And that's Up First for Thursday, May 1st. I'm Michelle Martin. And I'm Leila Faldin. Thanks for listening to Up First.
--:-- Leila Faldin: You can find more in-depth coverage of the stories we talked about today and lots more on NPR's Morning Edition, the radio show that Steve Inskeep, A. Martinez, Michelle Martin, and I host.
--:-- Leila Faldin: Find Morning Edition on your local NPR station at stations.npr.org.
--:-- Leila Faldin: Today's episode of Up First was edited by Rafael Nam, Ryland Barton, Vincent Ni, Janaya Williams, and Alice Woelfle.
--:-- Leila Faldin: It was produced by Ziad Buchh, Nia Dumas, and Christopher Thomas.
--:-- Leila Faldin: We get engineering support from Damian Herring, and our technical director is Carleigh Strange.
--:-- Leila Faldin: We hope you'll join us again tomorrow.
