Trump blames the government shutdown and Powell for the slowdown.
The BEA’s GDP Report for 2025 Q4 dramatically missed estimates of 3.0 percent by GDPNow and 2.8 percent by Bloomberg Econoday.
Real GDP 2025 Q4 1st Estimate (Advance)
- Real GDP: 1.4 percent
- Real Final Sales: 1.2 percent
- Real Final Domestic Sales: 1.3 percent
- Real Final Private Domestic Sales: 2.4 percent
- Real GDI: Not available in first estimate
Percentage Point Contributions
Percentage Point Contributions to GDP Detail
- PCE Services: 1.59 PP
- PCE Goods: -0.01 PP
- Government: -0.90 PP
- Residential Investment: -0.06 PP
- Nonresidential Investment: 0.51 PP
- CIPI: 0.21 PP
- Exports: -0.01 PP
- Imports 0.18 PP
PCE stands for Personal Consumption Expenditures.
CIPI stands for Change in Private Inventory.
Imports neither add nor subtract from GDP by definition (D meaning domestic). However, the BEA assumes all sales are domestic so it adjusts by the dollar amount of imports.
I wish the BEA would point this out, but Imports do not subtract from GDP. They have no impact at all.
Enormous Topline Miss
This is the Biggest Miss by GDPNow in years. However, GDPNow was very close on Real Final Private Domestic Sales with its 2.6 percent estimate.
The difference between the Real GDP estimate and Real Final Sales is Change in Private Inventories (CIPI) that nets to zero over time.
Real Final Sales was only 1.2 percent.
Trump took aim at Powell and and the Shutdown. I will discuss in a second post. The economy is cooling rapidly led by labor markets.
Tariffs did nothing to reduce imports but they were a tax on consumers.
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A recession proof industry is the last industry standing.
For all the spending that goes on GDP is way too low.
Bombs 7 countries in one year.
Latest: Preparing to bomb Iran for many weeks.
Trump will lift GDP by spending/bombing.
gov shutdown
Of course the GDP is slowing. That was obvious last year. Trump has caused so much chaos with the economy that we now resemble a banana republic. Trump part 2 sucks ass
“But the Dow is at 50,000.”
For now!
Trump just got bitch-slapped by the Supreme Court as Mish projected.
Congress can now approve Trumps tariffs (not retroactively) OR they can hold him accountable for his illegal/unconstitutional tariffs.
Accountability would look something like an unredacted release of the Epstein files and full accountability of the perpetrators.
Congress can after all do the right thing on rare occasions. This would also relieve them of their collusion or conspiracy to cover up criminal activity under the RICO Act.
It would not relieve the DOJ of its accountability under a potential RICO Act prosecution.
If there were ever a time for Trump to be held accountable? This is another good one!
you are dreaming. you live in a very evil empire of war mongering nihilists.
😉
I can not argue about the war mongering nihilists, our government is focused on the economics of war.
That said, societal pendulums do swing back slowly at first but then quickly once momentum is established. At this point there is certain and clear resistance to the Trump regime becoming palpable in many sectors of the USA.
I consider the pendulum to be in motion and swinging against Trump…
we are a crumbling evil empire. the pendulum might just swing to a secession and civil war here, and a world war of usa against everyone. i know you don’t know. i know i don’t know.
Oops…the ATL FED was way off, again. Maybe it’s a good time to scrap GDP NOW. They really suck at what they do.
GDPNOw has had a very hot hand for a long time.
gdp now and gdp itself is mostly rubbish. they count government warmongering as productive. i think some acid head at a grateful dead cover band show, has a better handle on the economy than that flim fammery. my butcher and plumber and my utilities bills tell a more truthful story of domestic production.
Good call on the Supreme Court Mish, exactly the outcome you predicted.
This is just getting started. Tourism is down, and it’s going to get worse. This country is going down.
@Mish
This is worth writing about
https://time.com/7380033/supreme-court-tarriffs-ruling-trump/
Just thinking about this for a moment – it increases the odds that bombs will soon fall in Iran.
“Unrelated” you say …. if so perhaps you haven’t been paying attention.
I agree .. Trump takes his anger out on people.
– Trump blames the government shutdown and Powell for the slowdown.
> Trumps time to start looking in the Mirror, OR start removing some old dogs out of your inner circle, and add some Younger thoughts and ideas in there places…
>> What’s being recommended by His advisors Is clearly Not Working!!!
Trump doesn’t have advisors, he doesn’t need them.
They are very important to him, they all kiss his ass one by one at the beginning of each meeting.
Butt lickers are not advisers.
pid
Not sure where we go from here with SCOTUS neutering Trump’s tariffs. Will GDP go up now that stupid tax is void or will there be more chaos?
The volatility is going to be great for options traders!
That’s over more than $175 billion in US tariff collections that government must pay back.
Companies have been hedging against this outcome. For some time, hedge funds have been purchasing the rights to tariff compensation from companies that paid these illegal duties. Big day for them.
Apparel retailers stocks are soaring now that they have been “unshackled” from Trump’s nonsense. I think they’ll come crashing down when Trump follows through with a tantrum.
Got options?
Did the court rule that the tariffs have to be paid back?
No but if you are a company and paid billions you can sue and the courts will likely agree that refunds are in order.
They don’t have to say that- the fact that the tariffs were illegal means that the government is clearly liable for them in court now.
So… buy stocks? Rebates to the companies, none to the consumers and no prices will be lowered anytime soon as Trump tries to backdoor other ways to tax.
Plus the tax refunds will muddy the outlook. Probably be a modest rebound 1st quarter, with a huge increase in the debt.
the big outcome of this is inflation WILL go down now so the Fed could have reasons to cut.
But then again, if Trump disrupts oil market, inflation may not be impacted.
Rates are up. COST and WMT are down. The market is not seeing lower inflation.
So the tariffs have had the effect of prompting other countries to make alternative deals, which they will presumably continue with, so the US has lost out massively on exports/markets with nothing now to show for it? This is an economic policy that is far too genius-level & subtle for my comprehension
Supreme Court strikes down most of Trump’s tariffs in a major blow to the presidentThe decision does not affect all of Trump’s tariffs but invalidates those implemented using an emergency law.