President Donald Trump has addressed concerns from experts about a potential recession in the United States, following a contraction in the economy over the past three months.
Recent data from the US Bureau of Economic Analysis indicates that the gross domestic product (GDP) fell at an annual rate of 0.3 percent in the year’s first quarter.
The drop in first-quarter growth was influenced by a substantial increase in imports as U.S. companies rushed to procure foreign goods ahead of Trump’s significant tariff impositions.
The GDP decline during January to March, reflecting the nation’s goods and services output, contrasts with a 2.4 percent increase in the preceding three months of 2024.
Imports surged at a 41 percent rate, the most rapid since 2020, reducing first-quarter growth by five percentage points.
Consumer spending also decelerated significantly, growing just 1.8 percent compared to 4 percent in the last quarter of the previous year, and federal government spending dropped by 5.1 percent in the first quarter.
Economists polled by FactSet had anticipated a 0.8% economic growth for the first quarter, though many foresaw a GDP decline.
Financial markets reacted negatively to this report.
In response, President Trump took to Truth Social to address these figures, attributing the situation to former President Joe Biden.
“This is Biden’s Stock Market, not Trump’s,” he stated. “I didn’t take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers.
“Our Country will boom, but we have to get rid of the Biden ‘Overhang.’ 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!!!”
These developments come as Trump’s international trade conflicts have affected businesses, with tariffs of up to 245 percent on China, which has reciprocated with up to 125 percent levies on US imports.
Nonetheless, the report highlighted some positive aspects, such as a 21.9 percent increase in business investment. A segment within the GDP data indicating the economy’s core strength grew at a robust 3 percent annual rate from January to March, slightly up from 2.9 percent in the final quarter of 2024.
This segment includes consumer spending and private investment, excluding fluctuating elements like exports, inventories, and government spending.
The import surge—the fastest since 1972, excluding Covid-19 disruptions—is expected to reverse in the second quarter, relieving some GDP pressure.
Consequently, Paul Ashworth from Capital Economics predicts that growth for the April-June period will recover with a 2 percent increase.