Indicators of U.S. Economic Decline Pre-Trump Tariffs: Spotlight on Q1 GDP

# U.S. GDP Growth Data Under Trump’s Second Term Scrutinized Amid Economic Concerns The forthcoming release of the U.S. first-quarter GDP growth rate is attracting significant attention as fears mount over a potential economic slowdown during President Donald Trump’s second term. Early indications suggest a decline in economic momentum in the U.S., occurring even before the full impact of the administration's tariff policies has been realized. On April 26, Bloomberg reported that the U.S. Commerce Department would release the advance estimate of GDP growth for the first quarter (January to March) on April 30. Preliminary forecasts indicate that the GDP growth rate may have increased by just 0.4% on an annualized basis compared to the previous quarter. This marks a significant deceleration from the 2.4% growth observed in the fourth quarter and represents the weakest performance since the second quarter of 2022. Anna Wong, an analyst at Bloomberg Economics, partly attributes this slowdown to the Trump administration’s announcement of tariff hikes. She stated, “The warning on higher tariffs seems to have prompted firms to boost imports, worsening the trade deficit, which ultimately dragged down economic growth.” # Rising Economic Stagnation and Recession Fears The stagnant growth trend underscores broader concerns about a slow economy and the looming possibility of a recession in the U.S. This sentiment is reflected across key U.S. asset classes. Equities, bonds, and the dollar have all shown a “triple weakness,” intensifying market anxieties. Adding to the bearish outlook, the International Monetary Fund (IMF) has revised its 2023 forecast for U.S. economic growth, lowering it by 0.9 percentage points from its January estimate to 1.8%. A Bloomberg survey indicated a 45% probability of a recession within the next 12 months, further highlighting the precariousness of the current economic climate. # Calls for Policy and Market Stability Amid Uncertainty Experts stress the need to resolve trade-related uncertainties and restore confidence in economic policy to mitigate the risks. Brett Ryan, Senior Economist at Deutsche Bank, commented, “Resolving the trade war and building policy credibility are critical steps needed to enable robust economic growth.” Domestic sentiment and consumer activity are also experiencing noticeable shifts. Data from Google shows that searches for terms like "global financial crisis" and "Great Depression" are reaching record levels, reflecting heightened public unease. CNBC reports predict a rise in recession-related content and a potential increase in divorce rates tied to financial strain. Yahoo Finance noted that, while U.S. economic indicators remain relatively resilient, pessimistic outlooks are gaining traction in multiple surveys. # Goldman Sachs Predicts Slowdown Manifesting Later in the Year Goldman Sachs projects that signs of economic deterioration will become more evident by mid-to-late summer. The firm pointed to inflation, weakening consumer activity, and job market softening as key factors likely to suppress growth. It also emphasized that most major economic distress signals tend to manifest roughly four months after triggering events. # Global Attention Fixed on Implications of GDP Report The GDP announcement is expected to have a significant influence on the trajectory of U.S. economic policies and broader market sentiment. As investors and policymakers worldwide closely monitor these developments, the data may serve as a bellwether for the overall health of the global economy.