This morning, after the conclusion of President Trump's first 100 days, the country awoke to a new metric covering much of his early time in office — and it's not particularly glowing.
U.S. gross domestic product (GDP) shrank 0.3 percent during the first three months of the year amid uncertainty around Trump's tariffs.
For comparison, the GDP was up 2.4 percent during the last quarter of 2024. This is the steepest decline since early 2022. Economists had expected a slight gain rather than a drop.
Yes, but: The figures aren't as clear-cut as the topline number suggests. This number likely overstates how bad things are, analysts say, because imports surged ahead of many tariffs being implemented.
The Hill's Sylvan Lane : "The first-quarter import surge took roughly 5 percentage points off of the GDP growth rate, according to the Commerce Department, washing out nearly 4 percentage points from domestic investment and roughly 1 percentage point from consumer spending."
Wednesday's GDP report "probably overstates the economy's weakness, but the economy's weak," Mark Zandi, chief economist at Moody's, told The Wall Street Journal. He pointed to "slower consumer spending and the decline in federal government spending in the first quarter."
A decline in consumer sentiment in April "doesn't lend confidence that they're going to hang tough here," he said. "If the administration can't find an off-ramp on the tariffs soon…then I think we're going to see a lot more negative GDP numbers dead ahead, and ultimately job losses," Zandi added. ()
The stock market is another indicator of how things are going: The . The S&P 500 lost 1.7 percent, the Dow fell by 1.5 percent and the Nasdaq dropped by 2.4 percent.
Trump is trying to move the blame: "This is Biden's Stock Market, not Trump's. I didn't take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers," Trump posted this morning on Truth Social, telling Americans to "BE PATIENT!!!" 🔎
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A few things to know:
1. This GDP data covers January, February and March. It doesn't factor in the hefty reciprocal tariffs that Trump announced on the infamous April 2 "Liberation Day." However, the market fears were reflected pre-April, so it isn't completely irrelevant.
2. The data is messy: the data is misleading because of how the government adjusted for a surge in imports to get ahead of the incoming tariffs.
3. The GDP — gross *domestic* product — does not include imports. Imports are subtracted from all goods and services sold in the U.S.
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