Locator: 48585GDP.
Updates
May 4, 2025: probably the best explanation, link here. The unprecedented surge in imports was due to US importers anticipating huge jump in tariffs. If importers misplayed this, we could see a lot of summer discounting, which could extend into the holiday season. But there's a bigger story here: this is why "this doesn't feel a depression."
Original Post
1Q25: GDP, first read -- a minus 0.3%. GDPNow had been trending toward a minus 2.7%.
If the import data comes in better than expected, the 1Q25 could turn out to be positive.
GDPNow has 2Q25 at a positive 1.1%.
Back to the import data:
First-quarter gross domestic product data released earlier this week showed that the U.S. economy deflated suddenly at the start of this year.
The negative reading might turn out to be more of a mathematical mirage rather than the beginning of a recession.
Inflation-adjusted GDP declined at an annualized rate of 0.3% (see above) during the first quarter.
The historic 41% surge in imports during the first quarter ahead of expected tariffs subtracted 5 percentage points from growth. Those imports should show up somewhere else, either in inventories, consumer spending, or investment
We'll see. But all of a sudden, all that talk of a recession is less worrisome.
By the way, historically, it took two quarters of negative growth to define a recession. All of a sudden, folks are suggesting a single quarter of barely negative growth is now defined as a recession.
