Posted on 05/04/2025 6:07:13 PM PDT by SeekAndFind
The U.S. GDP shrank slightly in the first quarter – something we never like to see. This data predates the last four weeks of the trade/tariff war trauma, so we are worried about the second quarter coming in negative – which would technically mean recession. If we could get the tax bill signed sealed and delivered, that would provide immediate juice for the economy. Instead, Congress dithers, and they will get blamed for the technical recession.
But there was some good news in the report. Much of the “growth” under Biden was “fake growth” driven by trillions of extra government spending and debt.
In Trump’s first quarter back in office, he managed not only to slow government purchases, but to decrease them slightly—the first time in three years. That shows up as a subtraction to GDP.
But here’s the showstopper: investment (the impetus of long-run real economic growth) soared, up 22% at a seasonally adjusted annualized rate. This is the rocket fuel for future growth that America needs. This was the opposite of tepid business investment under Biden.
On balance, a quarter with surging investment and slowing government is not bad at all.
Exactly and why the GDP is down.
How many percent of the US GDP is attributed to Government Spending?
No more “throwing gold bars off the Titanic”!
“If we could get the tax bill signed sealed and delivered, that would provide immediate juice for the economy.”
BS. Taxing in of itself does not make for a better economy. How about a clean bill that removes 1,000,000 federal employees for starters, that leaves us with a paltry 2,000,000 fed employees. It is a pretty good guess we’ll survive.
That chart needs to scroll to the right. Writer likely didn’t do it. Imports exploded.
GDP = Consumption + Govt Spending + Investment + (Exports - Imports). The surge in Imports generated the downtick in GDP. It will reverse when the Imports in this quarter cease that surge.
As for firing 1 million of the 3 million Federal Employees, about 1.2 million are DoD, so if you want to protect that, you have only 1.8 to work with. So 1 million extracted from 1.8M leaves 800K doing what 1.8 used to do, or trying to.
Doesn’t seem likely . . . especially if we insulate Border control from the cut. And NTSB. Or whatever else you think is useful.
BTW the firing requires severance, so there will be a significant cost, as well as 18 months of COBRA.
It would provide “certainty” for sure
Also ... My understanding is government employee COST is counted in GDP. With so many federal workers laid off due to DOGE, that also would reduce GDP.
Th3 GDP has been negative for at least 3 years.
FTA——In Trump’s first quarter in office, he not only slowed government purchases,
but decreased them slightly—the first time in three years. That shows up as a subtraction to GDP.
But here’s the showstopper: investment (long-run real economic growth) soared, up 22% at a seasonally adjusted annualized rate. This is the rocket fuel for future growth that America needs.
This was the opposite of business investment under bungling Biden.
Under Biden they changed the definition of a recession. I bet they change it back if we do shrink 2 quarters in a row.
If imports are calculated in the GNP then the massive buy prior to Trump taking charge should be considered.
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