US GDP figures fall as imports soar fuelling recession fears
US President Donald Trump has claimed the slump has 'nothing to do with tariffs' and was instead 'Biden's stock market' and an 'overhang' from the last president. Joe Biden's spokesman clapped back saying the US was heading towards a 'Trumpcession'.
But an awkward social media post by Mr Trump from last year has resurfaced where he claimed credit for the economy going gangbusters under Mr Biden. Now he is in office, he insists the negative economic numbers are actually his predecessor's fault.
On Wednesday, US time, the nation's Commerce Department stated that US gross domestic product (GDP) had fallen by 0.3 per cent between January and March.
That compared to growth of 2.4 per cent in the last three months of 2024. The most recent fall in US GDP was in 2022, during Mr Biden's presidency, when the economy fell by 1 per cent.
Two quarters of economic contraction is generally considered a recession.
Most analysts have said the downturn in growth is due to a huge uptick in imports ahead of tariffs coming in.
Imports have surged by more than 40 per cent as companies stock piled goods ahead of tariffs being imposed which would make them substantially more expensive.
Imports count against GDP figures so this upsurge dragged the overall figure down.
In contrast, consumer spending and business investment remained in positive territory.
Although consumer spending growth does appear to be slowing. And that's' concerning some economists.
'There's a lot of reasons to expect the underlying trends in the US economy to soften,' economist at S & P Global Market Intelligence Ben Herzon told the New York Times.
White House blames Biden, cold weather
On Wednesday morning, Mr Trump and the White House scrambled to paint a far rosier picture and shift blame away for the president's policies.
'This is Biden's Stock Market, not Trump's. I didn't take over until January 20th,' said Mr Trump on social media. The Commerce Department figures cover more than two months of Mr Trump's president.
'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!!!,' he urged.
The White House blamed the GDP figures on imports as well as cold weather and the Los Angeles wildfires.
Awkward Trump social media post from 2024
Mr Trump may well be insisting the current downturn is due to it being 'Biden's stock market,' but an incovenient social media post from January 2024 has resurfaced where Mr Trump, who then wasn't in power, took the credit for a healthy economy.
'This is the Trump stock market,' he wrote on January 29.
'Investors are projecting that I will win and that will drive the market up'.
'Plummeting toward a Trumpcession'
Mr Biden's spokesman Andrew Bates rubbished Mr Trump's claims.
'When Joe Biden handed Donald Trump the best-performing economy in the world, experts praised the US for leaving every other wealthy nation 'in the dust,'' he said in a statement.
'Now we're plummeting toward a Trumpcession,
'What happened with the numbers today is that we had a fairly extraordinary surge of imports, driven by the rest of the world trying to get their products in here before the tariffs,' Trump economic adviser Peter Navarro said.
'Next time, that won't be the case at all, and it will reverse,' he says.
The White House also claimed that 'core GDP' grew by 3.0 per cent. Core GDP isn't a standard measure but may focus on consumer spending and investment rather than imports.
It also said domestic investment 'soared' by 22 per cent.
The major US indices all fell upon opening but recovered some losses later in the morning.
The Nasdaq was down 1.5 per cent, the S & P 500 by 1.05 per cent and the Dow Jones by 0.74 per cent.
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