Our forthcoming book is The Comeback: The 2024 Elections and American Politics. The second Trump administration is off to an ominous start.
An update on gross domestic product (GDP) showed a sharp drop in growth. The US economy contracted at an annual rate of 0.3% in the first quarter, according to an advanced estimate released by the US Bureau of Economic Analysis on Wednesday.
The decrease primarily reflected an increase in imports as Trump's tariff push rattled confidence and businesses rushed to stockpile. Economists had expected a drop in growth of 0.1%. In the fourth quarter of 2024, real GDP increased 2.4%.
Prior to the GDP release, an ADP read on private payroll growth in April showed a pullback in hiring amid what the report called a "difficult" environment defined by an "unease" among businesses.
On the inflation front, the March reading of the Federal Reserve's preferred inflation gauge showed prices eased last month as investors brace for an uptick in pricing pressures following the implementation of President Trump's tariff agenda.
At the same time, inflation in the first quarter clocked in hotter than expected, complicating the path forward for the Federal Reserve. The "core" Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 3.5% in the first quarter, above estimates for 3.2% and above the 2.6% seen in the prior quarter.
Americans are noticing. Ariel Edwards-Levy, CNN:
A 59% majority of the public now says President Donald Trump’s policies have worsened economic conditions in the country, according to a new CNN poll conducted by SSRS, up from 51% in March and on par with the worst numbers Joe Biden saw during his presidency.
Americans remain broadly unhappy with the nation’s economy, the survey finds, and there’s little enthusiasm for the White House’s sweeping new trade policies. With the impact of new tariffs still largely to come, 6 in 10 already say that Trump’s policies have increased the cost of living in their community, with just 12% saying his agenda has helped to bring prices down.
