Consumer demand continues to defy pressures on the economy, Hope writes.

Catch up quick: Overall U.S. GDP shrank at a 1.4% annual rate in the first quarter, the Commerce Department reported today. 

• But within that figure, consumer spending remained strong, growing at a 2.7% rate.

Why it matters: The contraction — the first since the start of the pandemic — “shouldn’t be taken as a signal of heightened near-term recession risks,” JPMorgan chief U.S. economist Michael Feroli wrote in a note today. 

• It should instead “reinforce concerns about the economy's longer-run growth potential.”

State of play: The factors that dragged down the economy were not directly related to consumer activity — suggesting that underlying growth remains strong for now, Axios’ Neil Irwin notes.

• Trade continued to drag on growth for the seventh straight quarter as exports fell unexpectedly. 
• In response to last year’s overcorrection of inventory buildup to avoid 2020’s supply chain snafus, businesses continued to slow down their inventory stockpiles — and GDP counts that as a negative.
• When stripped of those two factors, the U.S. economy grew at a 2.6% rate last quarter, a slight uptick from the end of last year.

The big picture: Consumer spending continues to grow in part because demand has continued to move from goods to services.

• “The overall U.S. consumer from our vantage point is in good shape,” McDonald's CEO Chris Kempczinski said on this morning’s earnings call. 

What to watch: JPMorgan doesn’t expect the Federal Reserve will “read much into today’s report” and cause it to come off its path of tightening. 

• The negative headline number may, however, become a political liability for President Biden and the Democrats, Neil notes.
• Also, revisions. The advanced GDP report generally gets revised substantially.

📈 Fidelity plans to hire another 12,000 people to handle growth from a surge in individual investing. (WSJ)

📉 Robinhood monthly active users dropped by 8% last quarter. (CNBC)

🤷‍♂️ Twitter admitted to overstating users. (Axios)

🍏 Apple beat expectations with quarterly earnings. Its $97.28 billion in revenue set a record for the March quarter. (Axios)

The Biden administration released a regulatory proposal that would ban the sale of menthol cigarettes in the U.S, Axios' Pete Gannon writes.

Why it matters: Menthols have accounted for a growing share of the cigarette market in recent years, now making up more than a third of all cigarettes sold.

• They are more difficult to quit than ordinary tobacco and are more popular with children and younger adults.

Details: If approved, the rules would ban the sale of both menthol cigarettes and flavored cigars.

What's happening: The FDA would issue the new product rules no earlier than July.

• It will accept public comments on the proposal starting next week, and it will hold public listening sessions in June to hear from affected communities.

Of note: Menthols are especially popular with Black and Hispanic smokers, with 81% and 51%, respectively, using menthols in 2020, WSJ noted today.

Taking selfies has never been so easy.

• Snapchat today debuted a new flying camera called Pixy, a pocket-sized drone perfect for snapping that perfect shot (from your good side, obviously).

Details: The drone operates on its own without controllers, and everything shot on the camera is downloaded into a user's Snapchat library of content called "Memories," Axios' Sara Fischer writes.

• The drone is available for $229.99 in the U.S. and France.

Zoom out: The company unveiled the new drone alongside a slew of other announcements at its annual Snap Partner Summit.

"There are definitely indicators that would suggest the consumer is becoming more cautious right now."