Posted on 03/01/2025 4:41:08 PM PST by EBH
his would be the first negative quarter in three years, and comes as talk of a possible recession picks up
The Atlanta Fed's GDPNow model on Friday lowered its forecast for the U.S. economy to a contraction at a 1.5% annual rate. This would be the first quarterly contraction in the economy since the first quarter of 2022.
The weaker growth comes as talk of a possible recession in the U.S. economy has picked up.
"Overall economic growth is in the process of slowing down at an alarming rate," said Brian Bethune, an economics professor at Boston College.
The Atlanta Fed's forecast was slashed from an expansion at a 2.3% rate after the U.S. government reported a sharply higher trade deficit for January. Imports have surged since late last year, and economists say that reflects President Donald Trump's threats to hit Mexico, Canada, China and other trading partners with substantial new tariffs.
The high starting point for the deficit means it will be much larger than in the fourth quarter.
Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, said it was too soon to quantify the drag on headline growth. Attempting to pencil in a forecast "is a fool's errand given the lack of data on goods trade for February and March or any [first-quarter] data for services trade," Allen said in a note to clients.
The Atlanta Fed will continue to update its forecast with fresh economic data until the government releases its official estimate of first-quarter growth on April 30.
(Excerpt) Read more at morningstar.com ...
The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.
GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model. In particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal dynamics of the model.
Recent forecasts for the GDPNow model are available here. More extensive numerical details—including underlying source data, forecasts, and model parameters—are available as a separate spreadsheet. You can also view an archive of recent commentaries from GDPNow estimates.
Please note that we no longer support the GDPNow app. Download our EconomyNow app to get the latest GDP nowcast and more economic data.
Latest estimate: -1.5 percent — February 28, 2025
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -1.5 percent on February 28, down from 2.3 percent on February 19. After recent releases from the US Bureau of Economic Analysis and the US Census Bureau, the nowcast of the contribution of net exports to first-quarter real GDP growth fell from -0.41 percentage points to -3.70 percentage points while the nowcast of first-quarter real personal consumption expenditures growth fell from 2.3 percent to 1.3 percent.
Oh look, they will finally start actually reporting real data now and need to make a massive adjustment to correct for all the lying they did for Biden economy.
Exactly. We’ve been in a recession. Now as they correct everything, voila! Trump’s Tariff Recession!
We’ll be fine.
Policy results lag a little bit.
Once people get more in their checks the GDP will take care of itself.
But there will still be (dem) fear mongers mongering while Trump is in office.
I bought a buncha gasoline [no alcohol, all Pure Gas] on Friday.
A DOGE effect.
All the free money keeping the economy bubbling has been pulled.
The f- ing income tax has destroyed our purchasing, investing, and savings.
“Once people get more in their checks the GDP will take care of itself.”
Most people won’t be getting more in their checks - the biggest piece of the tax cuts are just extending the current rates, which are scheduled to expire. It is critical they are extended, but it won’t boost growth.
The biggest potential real tax cut is the no tax on Social Security, but that’s only ~$50 billion a year, which is 0.16% of GDP.
Very possible. Also the illegal immigrant effect...all those benefits spent into the economy caused much of the inflation. Now all that has stopped too.
They pulled this in 1993.
Bribem’s and Klamydia’s fault.
We could use a very strong recession.
It’s the only way to kill inflation.
Will bring interest rates down.
When Clinton was president?
Also an excellent way to kill the House majority. Impeachment 3 anyone?
A recession will not kill inflation. Remember "stagflation" of the 70s'?
Inflation ends when the government stops expanding the money supply with deficit spending. It slows down when banks stop expanding the money supply by making smaller volumes of loans (and raising interest rates to keep up their profit margins)
Recession is a consequence of inflation. It does not cure inflation.
“...A recession will not kill inflation. Remember “stagflation” of the 70s’?”
____________________________________________________________
It’s actually the killing of inflation that leads to the ensuing recession. Remember “Reaganomics” and Paul Volker?
economists say that reflects President Donald Trump’s threats to hit Mexico, Canada, China and other trading partners with substantial new tariffs.
Partisan hacks would say something so stupid that could be destroyed in 30 seconds.
A current non affect but promised future effect would not result in a present effection
It is a compilation of the results from a change in administration. No one said getting true America back would be easy.
First we all know, at least the partisan side, that the books were cooked. Last jobs numbers demonstrated that with ZERO growth of private sector jobs going to citizens.
Second all the ‘free money’ that was being handed out to illegals for benefits, medical care, housing, food, etc.
Third, other government spending being stopped by DOGE that was being fed into the fraud and abuse system set up by democrats.
Fourth, Covid spending? People supposedly ran out of covid funds several years ago? Hence see point two. Trump is deporting illegals by the thousands and the ‘free money’ has stopped flowing.
Fifth, until the production base is back in the United States for the long haul we are going to need those tariffs and they are justified. In fact that is what the chart actually indicates is needed.
My fear and has been my concern since the beginning of all this, is there is a large segment of citizens who are financially ignorant. Everything that is about to happen, well I just hope those government employees enjoy their golden parachutes.
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