The post US economy on track for negative GDP in Trump’s first quarter back appeared on BitcoinEthereumNews.com.

The US economy is already slipping in 2025, and the numbers don’t look good for President Donald Trump, who took the Oval back on January 20. According to the Federal Reserve Bank of Atlanta, GDP is on track to contract by 1.5% in the first quarter, a drop from the 2.3% growth estimate made just five weeks ago. The GDPNow tracker, which updates in real-time based on incoming data, used to point to 3.9% growth, but new numbers from the Commerce Department sent it plunging. An economic report released on Friday morning showed that personal spending fell 0.2% in January, missing the Dow Jones estimate of a 0.1% increase. After adjusting for inflation, it was even worse—a 0.5% drop, enough to wipe an entire percentage point off GDP expectations. The US economy relies heavily on consumer spending, as it makes up for more than two-thirds of GDP. A 0.2% decline might seem small, but it’s the largest monthly drop in four years. The hit came from weaker-than-expected retail sales, as Americans pulled back on spending due to high inflation, policy uncertainty, and market volatility. “This is sobering notwithstanding the inherent volatility of the very high frequency ‘nowcast’ maintained by the Atlanta Fed,” Mohamed El-Erian, chief economic advisor at Allianz and president of Queens’ College Cambridge, said in a post on social media site X. At the same time, exports took a major hit, dragging down GDP even further. The Commerce Department reported that net exports’ contribution to GDP collapsed from -0.41 percentage points to -3.7. The reason? A record $153.3 billion trade deficit in January. Economists say this could be the result of businesses stockpiling imports ahead of Trump’s potential tariffs, making the trade gap even worse. Markets react as bond yields invert and stocks swing Wall Street isn’t ignoring…

---

Filed under: News - @ March 2, 2025 3:11 am