• Repoter 11
• 30 Apr, 2025

The US economy just had its worst quarter since 2022 as President Donald Trump’s significant policy changes unnerved consumers and businesses.

Gross domestic product, which measures all the goods and services produced in the economy, registered at an annualized rate of -0.3% in the first quarter, the Commerce Department said Wednesday.

That’s a sharp slowdown from the fourth quarter’s 2.4% rate, and much worse than the 0.8% rate economists projected. GDP is adjusted for seasonal swings and inflation.

US stocks dropped after the GDP report was released.

The Trump administration has been on a chaotic tariff spree over the past several months, escalating trade tensions with China and unsettling Americans. Most economists say Trump’s monumental bid to reshape global trade is likely to send inflation climbing in the United States and even trigger a recession.

The president, however, deflected blame from the weak figures reflected in the first economic report card of his second term.

“Our Country will boom, but we have to get rid of the Biden ‘Overhang.’” he wrote Wednesday in a post on social media. “This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”

During a Cabinet meeting Wednesday, Trump reiterated that stance: “That’s Biden, that’s not Trump.”

The economy’s decline in the beginning of the year was driven by a wider trade deficit — a result of Americans front-running purchases to beat Trump’s tariffs — and cutbacks in government spending, according to a release. Imports skyrocketed from -1.9% in the fourth quarter to 41.3% in the first three months of the year. Meanwhile, exports registered at a 1.8% rate.

When imports exceed exports, that subtracts from GDP and that was by far the biggest drag on growth in the first quarter. The difference between imports and exports subtracted from GDP by the most on records going back to 1947.

Trump’s top trade adviser, Peter Navarro, called the GDP report “the best negative print I have ever seen in my life.”

“The markets need to look beneath the surface,” Navarro said Wednesday in a CNBC interview, pointing to the sharp increase in domestic investment last quarter. However, much of that came from businesses increasing their inventories ahead of tariffs, the Commerce Department said.