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Posted on 04/30/2025 5:53:33 AM PDT by ChicagoConservative27
The U.S. economy shrank in the first quarter despite underlying strength in consumer and business spending.
Gross domestic product contracted at an annualized rate of 0.3 percent, the Department of Commerce said on Wednesday.
The decline in U.S. gross domestic product marks a sharp reversal from the 2.4 percent growth rate recorded at the end of last year. This was the lowest rate of growth since 2022, when the economy avoided an official recession but contracted for two consecutive quarters.
Final sales to private domestic purchasers, a closely watched measure of business and consumer health, expanded at a healthy pace of three percent. That’s an acceleration from the fourth quarter of 2024’s 2.9 percent growth rate.
The decline in overall GDP was driven by a widening trade gap, as imports surged ahead of new tariffs announced by the Trump administration as part of its efforts to reshape global trade and put the U.S. economy on a more sustainable path. In addition, government spending contracted. Also, the January through March period was marked by wildfires in California and unusually harsh winter weather in the South and elsewhere.
(Excerpt) Read more at breitbart.com ...
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Shift from government money to private.
Final sales to private domestic purchasers, a closely watched measure of business and consumer health, expanded at a healthy pace of three percent. That’s an acceleration from the fourth quarter of 2024’s 2.9 percent growth rate.
I stopped paying attention to GDP growth rates a long time ago. It makes no sense to include government spending — especially at a time when the government is borrowing a staggering amount of money every month — in the GDP figure.
Prior to the launch of the tariffs companies imported a LOT of stuff. Imports are a negative against the GDP. They are brought into the country and placed in inventory. From an accounting basis, as soon as those materials are manufactured or sold at retail, they will be counted as a positive against GDP.
While I have no doubt we are in for a rough couple of months, THIS accounting hit is simply a process of moving expenses forward until the tariffs are settled. This portion should reverse over the next quarter.
Finally, “One data point does not make a trend.” Recessions happen over months…not one day.
Good point
This is why I no longer trust Breitbart. They have been assimilated by the Left. This is their talking point.
We WERE in a recession.
The official definition of a Recession HAD BEEN (up until then) two consecutive quarters of contracting GDP, and...they just changed the definition so the media could say we were not in a recession.
I don't trust Breitbart on anything anymore.
distorted number because importers rushed to get things into the country before the tariffs took effect. And those imports are subtracted from the GDP number.
Next quarter the GDP number will be through the roof because of the opposite.
This is good. Get a correction out of the way early, so growth can bloom in time for the midterms.
Exactly. It just goes to show all of us how large a role government spending played in the overall US economy. That said, expect this number to be revise — probably upward — a month from now.
One component of GDP is government spending. So any time you have a drop in government spending, there is going to be a commensurate drop in GDP in the short term until the benefits of less government spending kick in.
The GDP was ALL Government spending.
“domestic product marks a sharp reversal from the 2.4 percent growth rate recorded at the end of last year”. The GDP was 2.4% because we had 9% inflation. Now we have nearly zero inflation with a slight decrease in GDP, which was expected. It looks like Trump’s plan is starting to work.
“Finally, ‘One data point does not make a trend.’ Recessions happen over months…not one day.”
And two quarters in a row of these shrinking GDP prints and you’ve got a recession by the technical definition
Plus, this isn’t “one day,” it’s three months.
And the REAL finally, bad optics for the 100 days.
Better hope for a great jobs report the day after tomorrow to offset this bad print.
Yes-that was a root cause of a LOT of problems.
To: ChicagoConservative27
I found this little tidbit interesting:
Final sales to private domestic purchasers, a closely watched measure of business and consumer health, expanded at a healthy pace of three percent. That’s an acceleration from the fourth quarter of 2024’s 2.9 percent growth rate.
I stopped paying attention to GDP growth rates a long time ago. It makes no sense to include government spending — especially at a time when the government is borrowing a staggering amount of money every month — in the GDP figure.
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winding down of brandon’s window dressing of the economy by pumping numbers up with gummit spending & gummit job growth
I agree, but we need to be ready for the Left to pummel us with this temporary setback. Stand strong and don't go weak in the knees. Trump knows exactly what he's doing and we're primed for tremendous growth.
Spot on many not noting the lag time to get up to date results.
Remember when this happened under Biden, it “wasn’t a recession.” Will be interesting to see if the numbers are later revised up or down...
Notice that Trump faces fake injunctions from democrat fake judges everytime he tries to cut govt fraud waste and abuse spending that is part of the inherited Biden budget
If you believe that…you don’t understand what the print means and how it is derrived.
It was completely expected. The components will likely reverse in the next month.
The jobs number is a very lagging indicator. The amount of government jobs, while dropping, will not manifest until October when they actually leave the workforce.
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