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Unknown A
Well, it is happening. The GDP now model is predicting a GDP decline in Donald Trump's first quarter in office. The Atlanta Fed's GDP now model is predicting that gross domestic product in the United States will go down, not up 1.5% for the first quarter of 2025. That's right. TRUMP walks in the door and the first GDP number is now expected to be a decline. Now, I want to be fair and objective here. This forecast is not an official Fed prediction. It's based on early economic data. It could change. But here's what we do know. This very same model was predicting 2.3% growth just weeks ago. Donald Trump then took office. Consumer spending has collapsed. Consumer confidence has declined. Exports are falling off of a. A cliff. Eggs are at the highest price they've ever been in the history of the United States. And now we are looking at negative growth.
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Unknown A
Now I'm scared and I'm sorry, and I'm sad to say this, but this might just be the beginning. When you look at what we know, consumer spending shrank in January. That's when people are often spending holiday bonuses they received or gift money. But this year down 0.2%. And after adjusting for inflation, consumer spending down 0.5%. That is a brutal indicator of economic confidence. Secondly, exports, as I mentioned, exports are dragging down the GDP projections from a slightly negative contribution of -0.4% to a disastrous -3.7%. The effect of exports on GDP. The labor market is starting to soften. Unemployment claims have now hit their highest level since October. The bond market is flashing recession warnings with a inverted yield curve, historically one of the most reliable indicators that something not so good is coming. And while all of this is happening, what is Donald Trump doing?
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Unknown A
Is he putting together a coherent economic strategy? No, of course not. He's screaming about retribution. He's scolding and yelling at President Zelensky. He's threatening journalists. He's working on these mass deportations that will further destabilize the economy. And he is playing a hell of a lot of golf. And just understand, MAGA will not take responsibility for this. If we go into a recession, if unemployment spikes, if businesses start closing, do you know who they're going to blame? It's not going to be Trump. It's not going to be their own disastrous economic policies. It'll be Biden's fault. It'll be the fault of immigrants. It'll be the fault of corporations that went woke or of DEI crt. Maybe they will rehabilitate. Trump inherited an Economy with significantly cooled inflation, steady job growth. Right. You don't, you don't have to believe everything was perfect on January 20th. As I have told you, we look at the indicators.
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Unknown A
It's not mind blowing, but the Biden numbers were pretty good. Wages rising in excess of inflation. And we're starting to see the cracks, jittery markets, businesses that say, man, the tariffs will determine what I should be doing. Complete and total uncertainty. I guess we'll wait also. And now just dropping this hammer of the expectation of negative 1.5% GDP growth. Remember, we were told that Trump's policies would be so pro growth that it doesn't matter if they cost money. It doesn't matter if the tax cuts for the rich and corporations that are now being pushed are going to be revenue negative because they will stimulate the economy so much that GDP will go up and revenue is going to then increase. That's not the prediction of the Atlanta Fed. Now, let me address one other aspect to this and I think this is, sadly, I may have to do this a number of times.
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Unknown A
I continue to get emails from people saying, david, you seem delighted at the economic misery that may be forthcoming. I am not rooting for this. Much the opposite. Call me self centered and greedy. I don't want to be logging into my mutual fund account, my retirement account, my daughter's 529 and seeing a bloodbath. So this is not political. We are reporting the facts as we get them. I gave you the economic indicators on January 20. We gave it a month, just like I said we would. I gave you the economic indicators a month later. It was, I think March 20th maybe was a weekender. In any case, around March 22nd or 23rd, I reported to you. Here's what the economic indicators did in their first month. Some of these are completely flat. Some of these are starting to look not so good. I am not rooting for this.
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Unknown A
I am rooting for the opposite. I would like the country to do well under Trump because what's most important to me is not Trump's legacy, but what is the state of suffering or thriving of the average American. And it gives me no pleasure to report to you that this GDP expectation has now done a complete, in total 180. I hope it's wrong. Like I said, this is just a prediction which could be wrong or it may change. And that's what I'm hoping for. But right now it is not looking so good.