GDPNow surged 1.6 percentage points to 3.8 percent on improved import-export data.
International Trade in Goods
April Trade Data Details
- Balance: Improved from $-162.3 billion to $-87.6 billion, a whopping 74.7 billion improvement vs an expected consensus improvement of 19.3 billion.
- Imports month-over-months fell from 5.7 percent to -19.8 percent.
- Exports rose for an upwardly revised month-over-months fell from 2.3 percent to 3.4 percent.
When I saw these details, I was pretty certain GDP forecasts would surge, and they did.
GDPNow Latest Forecast
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 3.8 percent on May 30, up from 2.2 percent on May 27. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, the nowcast of the contribution of net exports to second-quarter real GDP growth increased from -0.64 percentage points to 1.45 percentage points, while the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth declined from 3.7 percent and -0.2 percent, respectively, to 3.3 percent and -1.4 percent.
The above clip from the Atlanta Fed
Contributions to GDPNow Forecast
- The decline in imports fueled contributions to GDP from -0.68 PP to 1.84 PP an improvement of 2.52 percentage points.
- The increase in exports fell from from 0.04 PP to -0.39 PP.
Trade Data Comments
Since exports increased, that second line may not make much sense, but all it means is the GDPNow model expected an even better result.
Note that imports have no actual impact on GDP, the keyword being domestic, and imports are foreign.
However, economists subtract exports to account for sales of goods and services factored in that did not occur. For example, when to buy a tool at Home Deport that gets rung up as a domestic sale even if it was from China.
To account for that mistake, economists subtract imports from GDP.
GDPNow has had a very hot hand with its model, so it will be interesting to see next month’s revisions as well as upcoming retail sales numbers.
I can find no other public estimates after the trade report, so this is all we have to go on for now.
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Always interesting selections and data posts, Mish. Keep them coming and don’t forget take your DAPT therapy for 6-12 months. The US trade balance reached a %GDP peak in 2005 and was reduced by 40-50 percent in 2009, the year of the US 2-3% GDP decline, offset by 7 trillion dollars of Federal Reserve rescue money infusion – about half of the 2009 US GDP. The global macroeconomy certainly appears complicated. The Fed will come to rescue again in 2025 and 2026, but will likely bail out only institutions like banks that own bad commercial real estate and mortgages on overvalued properties.
The banks collaboratively will buy US debt during a period of falling interest rates and make a tidy profit to offset their property holding losses. Like student loans, the individual US (consumer economy) owners of real estate and credit cards will not be so lucky. Does the asset-debt macroeconomy self organize the growth and decay of its equity, commodity, and debt instrument valuations in an elegantly simple fractal mathematical manner? Time will very shortly tell.
Banks don’t lend deposits. All monetary savings originate in the commercial banking system. DDs are just shifted into TDs. The only way to activate 14.063 trillion dollars in bank-held savings is through a nonbank conduit – by their owners.
Lending/investing by the Reserve and commercial banks is inflationary (increases the volume and turnover of new money). Whereas lending/investing by the nonbanks is noninflationary (simply activates existing money/savings).
The way to achieve higher R-gDp growth is by driving the banks out of the savings business which doesn’t reduce the size of the payment’s system (a velocity relationship).
sp500 flat since election day. down since inauguration day. plunge on TACO boy trade war threat, in april, made may look great after we discovered he is TACO boy.
GDP is garbage numer. ww3 with Russia looks likely. GDP will boom. doesn’t really seem too productive to me. it’s rubbish number because it’s loaded with government spending which is suicidal for an empire. art of war, chapter 1. if you wage war, make sure you fill the treasury with the venture. pax dumbfuckistan is a bunch of grifters.
OMG! Imagine what GDP would be if the $3.19T in exports & the $4.11T in imports were reversed? Our GDP might look a lot like China’s, 5%+.
Oh yeah, that’s right. That’s Trump’s policy goals.
TACO
Trump’s only policy goal is for his likeness to appear in world wide media daily. Trump is mentally ill and not fit to be POTUS.
The fed predicts 3.8 percent growth in q2
Gas prices down .
Inflation at 4 year low .
Stocks have best month of May in 35 years .
Personal income strong
Illegal crossings nearly 0 and prior administration said it would take an act of congress (not true).
There are some very positive signs we will see going forward .
That’s one way of looking at it. I have a different view. Chaos and uncertainty impact business decisions. This will show up in the economy before year-end. Expect a recession later this year.
Status quo was and is not working the entrenched DC establishment is about inriching theirselves . See 37 trillion in debt and trade deficits aproaching 2 trillion both parties are in on the gig . Trump is there for better or worst because people are willing to try somehthing different not because they view him as some sort of savior . There is a reason 4 of top 7 richest counties are around DC and they send their kids to private schools. Corruption at a collosal scale has been going on for years and they have been caught lying to the people thru their propaganda arm the MSM .
Hahaha! Trump isn’t there to STOP corruption! He is there to take advantage of it personally. He told everyone he would do this and he is following through. And he will walk over every person who voted for him to get as much as he can.
Yea right . Trump was already rich when he took office . He has not taken the salary from the government last i checked . See Warren , Schumer, Schiff , Pelosi Feinstein net worth figures all done on 400k salaries . Facts the left ignore but are worried about trump enriching himself off of government. You can’t make this stuff up .
Those people didn’t get to be worth 10s or hundreds of millions by their 400K salaries. They got there by insider trading, selling access to themselves and selling their votes on various issues.
In his 2nd term Trump is getting into the game. He’s doubled his net worth since he won the presidency via his Trump/Melania coin. Why? Because you need to have bought those in order to gain access (and influence) to him.
It’s nothing new, they *ALL* do it only Trump is going to do record amounts of it.
Lol! You’re right. You can’t make it up. And Trump is doing some of it in the open. Like the $400 million airplane he wants so much.
Please ,Obama had nothing, now is selling his Martha Vinyard home for many millions . Point is Trump doing it is pissing you guys off because he is Trump but not a piep from you guys when the Bidens , Clintons and Obamas were doing it in plane sight too . You guys are blind to the corruption on the left but scream when it is from the other side . ever heard of the Clinton foundation or Hunter Biden selling influence for dad? Oh nevermind dad pardoned him because He WAS above the law
Lol!
“You guys.” Love it.
You are clueless. I am not part of any group. I don’t even vote.
Trump isn’t pissing ME off. I am thoroughly enjoying this show! And I am taking advantage of the opportunities it presents.
How about you?
Dad pardoned hm because he was DAD, what kind of father would you be to not pardon your son? Family first always.
You are a fool to believe his passing up a measly salary compares with minting Trump coin, taking a $400MM plane, etc etc. His whole presidency is a scam to get even richer.
Trump was a loser long before POTUS.
TACO boy is just grifting live on teeeeveeee. the past presidents did it all behind closed doors. raygun to genocide joe. no exceptions. democracy works. amerikans are grifters. so we elect grifters. only 2% vote 3rd parties. mish voted the straight mish ticket for potus/veep. smartly. i vote libertarian.
Exactly! It’s time to do something different. And of course, PapaD is correct in that this change in direction will cause a certain level of chaos in the beginning like we’re in now. However, a lot of this trade stuff may be settled by this fall.
Time will tell. Just like PapaD has said in the past. Let the grand experiment begin. We’re into month 5 and thus far the sky has not fallen. Not even close.
“The rich are enriching themselves”
“Trump is willing to try something different”
I can’t believe that you honestly believe Trump is doing something other than getting himself rich, and his cronies. That’s what this whole process is doing. Tax cuts for the rich don’t help anyone but the rich, but perhaps I misunderstood your point.
Trump is there because he may have actually stole the last election.
I for one do not expect a recession by the end of the year, unless Trump’s recission package of $9.4B is passed & then followed up with about another $100B in cuts. What’s the probability of Congress approving that?
You guessed it, pretty close to ZERO.
Draining the O/N RRP facility added new money to the economy. An increase in MMMFs activated monetary savings. Means-of-payment money has always had a positive roc. The percentage of DDs to TDs has risen. That’s a seismic shift in the money markets.
–Michel De Nostredame
correct. but you are way too optimistic. we are becoming despised in the world, like israel is. not good for life and business. my neighbor is heading back to montreal with her daughter. been living here for 14 years. she cannot handle the crumbling evil empire. very intelligent smart human primate.
I suspect she is going to find a WAY different Canada than the one she left. Things went downhill fast under Turdeau and they aren’t going to get much better any time soon there.
I know because my family is all still in Ontario and their standard of living is falling rapidly.
Sooner or later, the illegals getting kicked out will hit population growth. It would not surprise me if the US loses population over the next 3 years. I’m not saying this is a bad thing, but in a consumer economy, it will hit GDP.
Great post! No sell in May & go away this year, baby!
But unfortunately, we do have one big negative. All of these anti-Israel illegals & students on visas welcomed by Joe Biden are continuing to do all sorts of bad things like shooting makeshift flame throwers & Molotov cocktails.
Yeah, the market goes up when the rate-of-change in our “means-of-payment” money goes up.
Woohoo! Trump is escalating the trade wars yet again. After seeking faster talks with the EU, Trump then doubled tariffs on steel and aluminum, which poisons any upcoming talks with the EU.
After agreeing to a 90 day truce with China and both sides temporarily lowering tariffs, Trump then broke the truce with more restrictions on chips and on Chinese students. Then he accused China of violating the deal! Lol!
I’m loving this show! Let’s keep it going longer so we can see the economic impacts later this year.
Like with Covid, the GDP figures are going to be wacky this year and for the same reason. Sudden supply chain disruption and reorganization are not conducive to statistical representations of reality. Going to hard to see if we are growing, stagnant or receding for the next few months. Nevertheless we will try.
Trump will only allow his people to report positive economic news from this point forward. Whether we have a recession or not doesnt matter .. no one will be able to report that word or any other word like it while Trump is lord.
That’s what all politicians do. Their team spins the statistics when they make public statements to conform to what they want us to believe. Biden’s team did it and all others before him. They can spin but they can’t change stats reported by the various bureaus. This is not China.
April was an anomaly due to the aggressive tariff negotiations, and one month does not make a full quarter. If imports re-surge in May and June, that may eliminate a lot of the growth imputed for April.
As of this data point, I’ll take the under on GDPNow.
The rosy GDP picture has been ongoing for quite some time now, and we’re overdue for a recession.
Not only is a recession due, promising punishing results for actors across the entire economy, but a pause in technological improvements is on the horizon for everything from industrial engineering (manufacturing of factories) to pharmaceuticals.
The economy, seen as a jigsaw puzzle with many pieces, looks good today. But its antecedents also looked good until the crash hit. The nearest comparison to today was the 2008 Great Recession, which was brought on by banking stupidities and the lust for money. The next recession will be brought on by Trump’s tariffs and the general slowdown in global trade. Count on it.
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Dark . Sport. Blog is my website — come by for more of my articles!
This situation with Trump changing his mind and therefore economic projection and perception only proves there is way too much power in the hands of one person. Economic data should not gyrate this much even in this case it is a projection. I seriously doubt the founding fathers had this in mind.
SCOTUS should put an end to it but the circus ringmaster will find a way to entertain the rabid base somehow.
The Founding Fathers had things like when Jefferson gave the order to stop all trade with the UK and France effective immediately. Now that was a disruption much worse than the one we have now. The Embargo Act of 1807 caused trade to collapse by two thirds and widespread unemployment in the ports. It also caused a jump in domestic industrial production.
The way the war in Ukraine is going, GDP will be going up 100% per minute soon.
Then 30 minutes later, GDP will drop to 0% infinitum.
If Putin shows restraint after today, I will be amazed. I wonder when Trump will call Zelenski CRAZY given Trump had no knowledge of the recent attack?
What a mess.
Putin just lost 1/3 of his bombers, that’s one expensive mistake for picking a fight with Ukraine. But more importantly, Trump wants to spend billions on a golden dome when all it takes is dozens of cheap $500 drones loaded with explosives to wipe out large chunks of military assets. From what I read, they were even shipped by clueless Russian truck drivers and shipped right close to the targets.
The rules of the game have changed and people are still playing with last century’s rules and tools.
Why the down votes. This post is 100% correct, drones are rendering expensive 20th century military hardware obsolete.
Russian trolls probably, I write comments like this to trigger them and smoke them out.
What other possible explanation is there than Russian sympathizers on the American right? This has been the case at ZeroHedge for many years, I assume they bleed over to this site over time.
So much tariff flip-flops. When do tariffs start to effect GDP or GDP lost touch with reality?
… until the waffler in chief decides otherwise.
How many flips have we flopped so far? I’ve lost count.
Trump does it again, he’s a genius at economics.
One doesn’t need a degree in economics to see what he and his team are doing is just common sense. But common sense eludes some people apparently. I expect more positive economic news over the coming months and years much to the dismay of the left.
Odds of rate hike may be going up.
To the moon Alice. Pow, right to the moon!
Hey Mish arent you calling for recession? does this change that call?
A crypto turn to save the US dollar?A financialised psychosis and the end of the re-industrialisation dream
https://warwickpowell.substack.com/p/a-crypto-turn-to-save-the-us-dollar
Try to post related links – this is way OT