Ahem…
The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 2.4 percent on April 30.
Of course a lot can change in the next two months but GDPNow is forecasting a sold second quarter.
Now, granted, it takes someone really special to undo the great GDP we had at the end of 2024, and I am not quite confident, despite how hard he is trying, that he will be as successful in the second quarter. 
LOL I would hate to hang my hat on a 2.4 percent gdp next quarter. The only way I see that being true is if the Tariff mess is done away with. Now that is very possible.
On a related tangent, it is worth noting that GDPNow had a MASSIVE miss on initial GDP. They had forecast -2.7. That has got to be one of their largest misses in quite sometime. I wish there was a way to easily see what categories they got wrong.
It is also worth noting that the second quarter is indeed different than the first:
Equipment much lower, by 75%, but imports also massively lower, by nearly 90%. That was my point about the first quarter not repeating in the second quarter. The disparity between imports and exports is forecasted to decrease by over 85%.
With only 1 month into Q2, with not even 1 month of data (data will be lagged from the calendar), the Q2 forecast is probably quite rough.
Even the actual measure of GDP can be subject to large revisions, and with the craziness we are having, even the final revised GDP estimates could be very noisy (and by the way, these GDP numbers from BEA are all just estimates of what is happening in the economy and then GDPnow is a forecast of that estimate, so forecasting something we cannot even measure exactly).
That said, a big chunk of the Q2 positive growth, the current +2.4% forecast for Q2 GDP growth, comes from +2.29% in personal consumption.
Good luck with that.
Seems suspect to hang a forecast on consumer spending, given all of the other data we have seen lately (sentiment, measures of factory order and cargo slowdowns, etc).
I’m happy to be wrong, just my sense of the data.
Their official model didn’t take into account gold imports which spiked. Their semiofficial adjusted forecast came in close:
Later a hint of recognition made its way into leadership:
CNN — In the space of a few hours, Donald Trump went from hailing America’s new “golden age” to warning parents their kids would have fewer toys — and they’d cost more. The president’s dizzying switch this week epitomized the hype surrounding his “Make America wealthy again” promise and the pain it might take to get there. Trump’s note of pessimism in a Cabinet meeting was a rare admission that his China trade war will mean fewer goods at higher prices and a dose of truth on a day when reality several times threatened to pierce the White House bubble.
So the view really is that ‚liberation day quarter‘, in contrast with ’DOGE quarter’, will end up seeing strong GDP growth??
BBC has an interesting article on the Chinese perspective:
At the same time, the link you provided at the top of the “What a difference a 100 days makes” thread shows the forecast for the current quarter to be a positive 1.6%
DB2
That was probably the same piece I saw last night. Thing is, China is probably already the primary source of cheap, junk, for much of the world. So, where will they find buyers to replace the USians?
Meanwhile, in the US, what will the psychotic parents do? We are all probably old enough to remember the fistfights in toy stores, over “Cabbage Patch Kids”. Micky D’s was offering “teeny beenie babies” as the bonus with Happy Meals. Psycho parents were mobbing the stores, grabbing the toy out of the bag, and throwing the food away.
Coincidentally, with all this discussion of trade, I was at a used book sale yesterday. I noticed a hard cover copy of “Free To Choose” on the table. The thought crossed my mind to buy it and give it a ritual burning, but that would be a waste of my cash.
Steve
That is why I keep an open mind and just follow along. It’s hard for anyone to predict the future. I would be very happy to see blue skies ahead.
This is what the China centric YT economics folks are saying …
Supported with their “data” that:
Shipping containers stacking in ports;
Small/medium size factories closing;
Empty cities as Populations of large cities disappear… Back to rural origins;
These SEEM to be non-USian biased.
YTs:
China Observer. Daily reports.
China Update. Tony. Daily reports.
Business Basics. An example.
Al Jazeera. An example.
This YT site is, IMO, definitely ANTI -US…
But this YT… I’m surprised.
Steven Van Metre.
Zeihan has, of course, weighed in. But, his “free” info, is now at least a week old.
Joe Blogs. Includes real estate, ghost cities, other economic stuff.
Much of Joe’s info is Russia centric.
Now, I’m seeing MSM (BBC, CNBC, etc) picking up and reporting similar content.
Add WSJ to the list MSM reporting China crisis.
China Update, Tony, says we are witnessing history.
Who has the cards?
Who will blink first?
FUD.
ralph
Lower the prices, dump half of it to current buyers, dump the rest in a landfill. Tell the Chinese workers it’s all Trump’s fault (true) and buckle down.
China. Full stop.
We already did. Multiple times.
In the 1990s, just 30 years ago and during the life of most Chinese living today, 2/3rd - 66% of Chinese lived at or below the poverty level.
The same party controlled China in 1990 that controls it today. The people in charge know their people can suffer far worse than ours without any political consequences. For us, the bond market can have a bad 48 hours and we get a 90 pause.
This is causing Chinese to display a nationalist fervor that is uniting them instead of dividing them (as it is us). They see the fault is the US which is increasing their fortitude, resolve, and esprit de corps.
Watch the full video. You are not likely to find US manufacturers that are willing to take a financial loss to “win” this. Chinese appear to be taking this personally.
The Beeb has been reporting on this trend for weeks: USians a no-show at Chinese trade shows. Smaller Chinese companies bereft of business. I don’t need to be looking at YT hysteria merchants, to ask the question: “who will they sell the stuff to, that USians are not buying?” Of course, the alternative, is to take such a dive on the price that their stuff is cheap, even with a 145% tariff.
Steve
We could have won this if we had just taken on the Chinese but when Trump attacked the whole world we already lost. That was the stupidest move by anyone since Hitler attacked Russia. He has isolated us from our allies.
I disagree.
I can buy “stuff” from lots of places. I might have to pay more… But I have the gold.
I’m in control. If I don’t like the “deal”, I go elsewhere.
China APPARENTLY is having trouble SELLING their stuff. They might “want” to go elsewhere, but SUPPOSEDLY" those other buyers are resisting being “dumped on”.
IMO, we, THE BUYERS, cards are stronger.
Did “we” already “blink”?
NOTE: I have NOT read, listened to or otherwise looked at TIG 'The Art of the Deal ".
Until 30 minutes ago, I asked Google AI Gemini for a SUMMARY and got this link:
Allow me to cherry pick:
CHP 1:
{ “You can’t be imaginative or entrepreneurial if you’ve got too much structure”
“Sometimes it pays to be a little wild” }
ralph’s paraphrase:
Be unpredictable.
Keep the other side off balance.
Change the rules … Unpredictably.
CHP 2:
{ go into the deal anticipating the worst”
Maximize your options – “I always protect myself by being flexible”
Know your market – “I ask and ask until I begin to get a gut feeling about something. And that’s when I make a decision”
Use Your Leverage – “The worst thing you can do in a deal is seem desperate to make it. That makes the other guy smell blood, your dead…. You have to convince the other guy it’s in his interest to make the deal”
Enhance your location. “Location location location”
Get the word out – “The final key to the way I promote is bravado. I play to peoples fantasies”
Fight back – “When people treat me badly or unfairly or try to take advantage of me, my general attitude has been to fight back very hard. If your fighting for something you believe in, even if it means alienating some people along the way – things usually work out for the best in the end”
“Life’s losers – who get their accomplishment from trying to stop others”
Deliver the goods. }
ralph’s paraphrase:
Be flexible- change your mind. Back track, side step. Keep em off balance.
MESS with their head.
Know your market n Use your leverage.
China economy is in crisis. Use that to your advantage.
Bravado n fantasies.
Make the opponent mad. Emotional. Freak em out.
Fight back.
See my comments.
MESS with the other side.
I DID read Sun Tzu “The Art of War”… 3 decades ago.
That “how to” book offered VERY similar advice.
I am NOT going to read TIGs book.
I AM trying to understand his mindset.
My goal is to position myself to at least “survive” … And maybe even prosper.
ralph
It is not just that.
Tariffs are on the wholesale level. People bought products across the board to avoid tariffs and a cutoff of supply. Assembly in the US.
It was not everyone buying but without the marginal increase caused as a one off by the tariffs, GDP growth would have been negative.
Do you think they care as much about not selling as we care as much about paying more?
I don’t. Again, most of the Chinese alive today remember when over half the country lived below the poverty line.
What is a few quarters of no sales compared to that?
I read it Ralph about 10 years ago when I was helping to negotiate contracts. I thought I might get something out of it but it seemed like mostly fluff. But maybe it wasn’t meant to give someone insight that was negotiating union contracts with companies.
