GDPNow first quarter of 2025: -2.8% (seasonally adjusted annual rate) | Hacker News Reader

GDPNow first quarter of 2025: -2.8% (seasonally adjusted annual rate)

atlantafed.org

15 pointsnabla97 comments

“The alternative model forecast, which adjusts for imports and exports of gold as described here, is -0.5 percent.”

The best output for the model is the above, not the raw figure, because in January the gold market got weird [1].

[1] https://www.bloomberg.com/opinion/articles/2025-02-13/gold-i...

That includes -4.8 percentage points from net trade which comes from two sources:

1) Importers getting ahead of tariffs in Jan and Feb. 2) -2.3 percentage points of the net trade deficit estimate was from imported non-monetary gold, because Americans want portable wealth right now.

The thing to be concerned about is that real consumption is up only 0.3% quarter-over-quarter annualized in this estimate. This is two-thirds of GDP. Investment is actually pretty strong, especially equipment (GPU servers).

Not to worry, the commerce secretary is already working to make the official GDP number for the quarter be bigly positive. (Pretty sure they also fired the committee that contributed to reviewing the data)

31-Jan Initial GDPNow 2025:Q1 forecast was +2.9%.

Almost 6% drop in the estimate. Uncertainty about tariffs, etc. means nobody wants to invest. SM Manufacturing Index, and Construction spending sink.

Can’t call a recession until we look back, I cannot imagine consumer spending is going to hold up under this stress. Consumer debt defaults are rapidly rising while prices are going up in anticipation of tariffs. Something is going to break.

(70% of the economy is consumer spending, 80% of employment is in services)

If you look at the components of their model:

  28-Mar Personal income & outlays -2.8%
   7-Mar Retail trade: -2.1%

Tourism is gonna be hit. Education is gonna be hit (especially if the rumors that the US is canceling hundreds of student visas as we speak for crimes such as liking certain tweets). Exports are gonna be hit thanks to tariffs in raw materials and retaliatory tariffs by other countries. Government sector jobs will be hit. Retail will be hit due to tariffs.

We are already seeing a reversal in sentiment and none of these impacts have actually been felt yet.

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