1st quarter GDP a disaster

Can you really blame Trump for 1Q GDP when he just took office on January 20? Well, maybe so. The talking heads say that higher imports are the culprit. Businesses stocked up on inventories, because they knew tariffs were coming. Recall that GDP = Consumption + Investment + Government Spending + (Exports - Imports). So higher imports mean lower GDP, all else being equal.

That said, the economists and statisticians are supposed to take the effect of inventory changes out of the equation. And the consensus appears to be that GDP may have actually increased. We'll have a better idea when 1Q GDP is revised sometime in the future, when we have better inventory numbers.

What's happening here is that the inventory build, in addition to being included in imports, is also a component of investment in the equation above. So to the extent the higher imports are for increases in inventory, they shouldn't affect GDP.

As Peter Navarro, one of the instigators of the Trump/Navarro/Pxmcc tariffs said today, this GDP report was "the best negative print I have ever seen in my life."

So blaming Trump is premature. However, he'll own the price increases and lower or negative GDP growth that will come, after "Liberation Day." Originally Posted by Tiny

exactly. Trump's first term tariffs didn't cause inflation either unlike some claim.

^^sir don't misquote me. i think Trump's tariffs are idiotic beyond belief. he thinks tariffs are going to make American manufacturing great again, which is pure lunacy. Originally Posted by pxmcc

Trump is forcing new investment in US industry. both domestic and foreign.

Trumps economic ideas come from 1930s or 40's. They have been proven wrong as many times as Trump has been in court and found criminally guilty for economic shenanigan's. While he has a win or two on liable laws, and has used the DOJ for his own pitbull, he's going to find out that many companies will not roll over and lie down. There are some that will take on the battle as a moral imperative. The 1st quarter results are exactly from all the BULLSHIT that MAGA Moron has spouted out about since beginning in February- and the day of liberation and America's golden age is a fucking ruse at best. He has no method or plan on how any company is going to build factories here if the infrastructure or labor market won't support it. Imagine Iphones getting made in Omaha Nebraska by a bunch of midwest corn farmer folks. Just not happening. The asian markets have not only larger pools of labor doing both basic and also skilled labor- plus having hands that are naturally about 1/2 the size of the mules of american workers allows them to work on smaller items, devices, like cell phones etc. NOW if you are talking about building automated factories here- yeah that might work, but that isn't a huge human labor field, but rather robotics. Might get a change of 20% of manufacturing in automotive and MAYBE higher levels of metal work. BUt things like large scale castings and other stuff has been done in china mostly due to costs, but also less OSHA constraints. If you think that american's are gonna want to work in a dirty steel mill again and all the fun of things like coal mines etc., you've got another thing coming. Plus- Oil is like 58 dollars a barrel today- and guess who's not drilling for more cheap oil?? The economics of what DJT is proposing just don't make sense. And lastly- if CHINA or Canada or any other country really wanted to fucking prove a point, they could cripple the USA in about 6 months.

Poor farmers and soybean producers are the ones who will be fiscally dead first. Originally Posted by eyecu2

nonsense. the economic ideas of the 1930/40's is FDR's New Deal socialist spending. the same thing today's progressive socialist democrats continue to want.


whatever Trump is, he's not a FDR socialist

FDR "The only thing we have to fear is...Trump himself".

GDP contracted. And another down day for the markets.
Originally Posted by VitaMan

1st and 2nd qtr of 2022 saw two qtrs in a row of negative GDP growth that was worse than the 1st qtr of 2025. While two consecutive quarters of negative GDP growth is a common rule of thumb used in identifying a recession, the government under Biden twisted itself into a pretzel to say why we were not "actually" experiencing one. If a definition isn't working for Dems, they change the definition.

While the overall S&P 500 index saw gains under President Biden, including strong performance in 2023 and 2024, there was a significant drop in 2022. This 20% decline in 2022 marked the worst year for the S&P 500 since 2008.

Perhaps you might want to hold off cheering bad news a while longer.

Why are you interested in 2022 ? Wasn't that the COVID years ?


In 2025, there is no virus......unless you want to refer to Trump and compare him to a virus.

^^lol sir..

well said. folmfao..

I am in Lake Charles La now.
The gas station on the corner says $2.35 for unleaded 87.

Fox News is reporting some States that gas is below $2. I don’t believe that but give it another month.


Trump announced yesterday that the big push will now be eliminating taxes on tips and taxes on Social Security.

We will see.

in a recession, sir, when GDP is contracting, prices go down because no one is buying anything, except food-mostly rice, beans, and ramen noodles-; water, tap water, not that pricey bottled shit; fuel-just enough to get to work and back, if you even still have a job-; and medicine-but only the medications that are life and death. might not be time to spike the football just yet..

I am in Lake Charles La now.
The gas station on the corner says $2.35 for unleaded 87.

Fox News is reporting some States that gas is below $2. I don’t believe that but give it another month.


Trump announced yesterday that the big push will now be eliminating taxes on tips and taxes on Social Security.

We will see. Originally Posted by Jacky S

... No, I'm sayin' that Trump had to begin the tariffs
in a good effort to conduct Fair Trade because Biden
hasn't done anything.

So, we understand the reason for the 1st quarter's dip.
But let's see what happens NOW - with more manufacturing
and energy growth.

#### Salty Originally Posted by Salty Again

What energy growth? the only thing that has grown is Trumps pockets and that of the GOP with a 1 billion dollar donation from the oil and gas companies and thier little club to the GOP. The ask was to get rid of the oversight and pesky ppl who don't want us to drill in protected areas. Trump agreed, but your comment was Energy Growth- So tell me where is that happening?? I don't hear about anyone out there sinking new holes in the ground at 5 million a pop currently; certainly no increases since last Sept till now.

A few manufacturers are shifting some production of items to domestic sites- to do a work around on the tarrifs etc. Even GM who does a ton of manufacturing and assembly in Canada will likely just move final assembly or majority over the border- but that won't increase jobs- just the type of jobs; does it really matter who puts the window sticker on the car???

I am in Lake Charles La now.
The gas station on the corner says $2.35 for unleaded 87.

Fox News is reporting some States that gas is below $2. I don’t believe that but give it another month.


Trump announced yesterday that the big push will now be eliminating taxes on tips and taxes on Social Security.

We will see. Originally Posted by Jacky S

I never thought social security should be taxed unless you are in the top 1%. Then you really don't need SS anyway. Not saying you're not entitled to it, as everyone paid into it, just like people and companies pay in the unemployement insurance; Just not everyone gets to use that benefit 100%.

Taxes on overtime and SS doesn't seem right to me. Having worked in the utilities and gas industry for 2 decades- I see where MANY ppl make 3 or 4 times their base pay in overtime- like linemen and emergency responders for electric / oil / gas. Why should they not pay their fair share of wages on income.

I also think that people who own a resource and then take out a loan on it, to use as income, should have to file a claim if they used it as income or for capital improvements. If it's income or used as such- it should be taxable.

All these ppl who own real estate and then borrow out the equity or ppl who do it with stocks and do that similarly- should be held accountable to pay their fair share.

87 octane at Sheetz in PA is 3.65 today btw. NO where near what the orange gibbon is saying it is. It may be sub 2.00 in texas by the refinery but I doubt it.

The contraction in first quarter GDP was expected to those who believed Trump was off his rocker. Second quarter GDP is going to be worse now that everyone can “see / believe” how bad his tariff policies really are.

Imma break this in to 2 posts, as it's difficult to tackle both at the same time (TL;DR), given the severe infection/manifestation of the woke mind virus, aka Marxist/Communism. Regardless:

Some have need to make tariffs sound easy. That's because of the DEI dumbing it down so that Communism will save them and deliver the "Equal Outcomes For All", that the Commie Kamala Harris mentioned recently - IMMHO. They are not. There are ten's of thousands of them world wide, maybe more. However, to start simple for the simple; two charts:


Seems simple in this view, which is why this view was created. But to understand tariffs, requires multiple, yu-u-u-ge, databases. Unfortunately, tariffs have been a thing for centuries. As such; they ain't simple, but at least Trump is trying to flatten the curve on them. Here are but two databases:

Harmonized Tariff Schedule

WTO: Get tariff data

What you are seeing play out, in near real time, is many countries coming to the table to renegotiate them, across the board. What if prices of imports actually go down and our exports increase?!? Would we need to have a funeral service for the Marxism in America?!? Cherish the thought...

I will point out this simple fact: Nobody, in human history has attempted this feat worldwide, simultaneously. It is typically the efforts of many special interest groups, under the flag of their country to protect their industry segment's interests.

Having said that; the New World Order doesn't much like it. Heck-fire, they even booted their chief architect, one Klaus Schwab, to the curb already. To be fair: Kicking USAID to the curb and stomping the bejesus outta it might have pinched their budgets and cash flows a fair bit.

Instant Oatmeal might taste nearly as good as real oatmeal, but instant gratification is not nearly as good as good old fashioned gratification, chocked full of hard work and topped with patience. Sorry kiddies, the sky did not fall down today. Good luck tomorrow.

The woke-tards want to scream from the hill tops about some tragically, severe, life ending dip, like it is the end of the world. For them, it may well be, as we have no need of Communism 'round these here parts.

Capitalism and "free" markets is our stock and trade baby, and Yes Virginia, it takes thinking, commitment and paying attention. Maybe if ya'll quit focusing on trying to make men give birth and chest feeding or having them beat heck outta women in sports, ya'll might have time to do more productive thinking things.

Here's a view point, based more in understanding than carping-on to save the precious Marxism that DEI is driving:

Kudlow Says Real GDP Is Booming Beneath the Surface of Q1 Data

Larry Kudlow says the recession talk sweeping through Wall Street and the press is based on a fundamental misunderstanding of the latest GDP numbers — and a refusal to acknowledge the early effects of President Trump’s economic agenda.

On his Fox Business Network show Wednesday, Kudlow took direct aim at what he described as a “media and Wall Street obsession” with the headline 0.3 percent decline in real GDP during the first quarter of 2025.

“The liberal press and their pals on Wall Street are talking about recession — because the first quarter GDP was scored with a slight decline of three-tenths of 1 percent,” Kudlow said. “Yet if you look under the hood of the GDP report, and carefully parse through the numbers, what you actually come up with is a rather strong economy, that’s growing at something like 3 percent.”

Kudlow pointed to what he called “core GDP” — a measure that strips out volatile components like inventories, government spending, and net exports. That narrower but more stable measure, known formally as real final sales to private domestic purchasers, rose at an annual rate of around 3 percent in the first quarter.

“Mr. Trump has barely begun, but take a look already at core GDP — which takes out the fluky trade import numbers from tariff front running and looks at just the heart of GDP, which is private sector consumption plus private sector business investment,” Kudlow said. “Well, looking at core GDP, you see an actual increase in the first-quarter economy — of 3 percent, no less.”

That strength, he argued, is being masked by a temporary surge in imports, as businesses stock up in anticipation of higher tariffs. Kudlow said this kind of activity is not a sign of weakness, but of confidence in future demand.

The highlight of the report, in Kudlow’s view, was a massive uptick in business investment.

“Business fixed investment increased nearly 10 percent at an annual rate in the first quarter,” he said. “And, even better, business equipment and machinery — which is an incredibly important harbinger of productivity, job increases, and real wage hikes — rose an incredible 22.5 percent. There’s no recession there.”

Kudlow attributed this to expectations that President Trump’s tax reform package will pass this summer. The administration has proposed 100 percent expensing for business investment, including factory equipment and buildings, retroactive to January 20, as well as a lower corporate tax rate on domestic production.

“So, what’s actually happening is that businesses are front-running the big beautiful tax cut that will be coming their way,” Kudlow said. “It’s a phenomenal story. It’s a story of reshoring.”

“The business tax cuts — along with the new personal tax cuts for service worker tips, overtime, and seniors’ Social Security benefits — will far outweigh any drag from tariffs.”

He also pointed to signs of sharply slowing inflation. The personal consumption expenditures (PCE) price index — the Federal Reserve’s preferred gauge — was flat in March, and the core PCE index also came in at zero. Meanwhile, the consumer price index fell by 0.1 percent.

“All of this inflation progress sets up a Federal Reserve cut,” Kudlow said. “That’s right, a rate cut should be coming.”

Finally, Kudlow called attention to what he described as a statistical oddity in the GDP calculation. While imports increased by $333 billion in the first quarter, private inventories rose only $140 billion — leaving, he said, nearly $200 billion “unaccounted for.”

“There’s a gap. Where’d those trade imports go?” he asked. “Did the roughly $200 billion gap between imports and inventories just evaporate? The pencil pushers over at the commerce department clearly can’t count.”

Kudlow said that if you simply add the missing imports back into GDP, you eliminate the contraction.

“And, when I do that, the real GDP growth in the first quarter of 2025 comes out to be 3.2 percent,” he said. “Even better than private domestic sales.”

For Kudlow, the conclusion is clear: the U.S. economy is not stalling — it’s revving up.

“That sets up an economy boosted by tax cuts and deregulation that can roar — perhaps in the second quarter, but certainly by the second half of the year and well into 2026,” he said.

I will point out this simple fact: Nobody, in human history has attempted this feat worldwide, simultaneously. It is typically the efforts of many special interest groups, under the flag of their country to protect their industry segment's interests. Originally Posted by Why_Yes_I_Do

Au contraire. Smoot, Hawley et al tried it. So did India and Latin America. It did not end well. On the other hand when countries like Chile lifted heavy tariffs and implemented other free market reforms, they prospered.

There’s another name for those many special interest groups, crony capitalists. Contrast with free market capitalists, who were favored by Republicans since Reagan, until Trump came along.

About your Part 2 post, poor Kudlow’s had to twist himself like a pretzel to maintain the favor of all the Republicans Trump brainwashed. He’s a free trader at heart. Watching him on Fox Business News is just sad.

It wouldn’t be surprising if 1Q GDP were revised so that it’s positive when better inventory numbers are available. But 3.2% is a pipe dream. Not all of Kudlow’s $200 billion in imports is missing. Some of it was already accounted for in consumption, one of the components of GDP. For example, I saw what was coming and bought an imported car. Yes, the price paid by the dealer was subtracted from GDP, but what I paid was added back to it. In other words, all that $200 billion in imports during the first quarter didn’t go into uncounted business inventories. Some was actually purchased by consumers wanting to buy before the tariffs were imposed, and counted as consumption in first quarter GDP. But yes, Kudlow probably was partly right. The $140 billion investment by businesses in inventory build, which was included in GDP, probably was actually higher, and thus actual GDP growth probably was better than -0.3%.

But yes, Kudlow probably was partly right. The $140 billion investment by businesses in inventory build, which was included in GDP, probably was actually higher, and thus actual GDP growth probably was better than -0.3%. Originally Posted by Tiny

... Rather pleased that YOU understand - because Kudlow
was correct about this. Which surely shatters the false
narrative about the 1st quarter being "a disaster"...

... Because YOU and I do know that next quarter's
numbers will be better.

##### Salty

There was no need for this disaster to happen.


Now everyone has to wait to see if things will recover......and this is WINNING ?