by WorldTribune Staff, May 4, 2025 Real World News
Wall Street was on edge and anti-Trump media were gleeful this week as a 0.3 percent decline in real GDP was recorded during the first quarter of 2025.
The stock market followed the bad data with an equity drop.
President Donald Trump posted on Truth Social that "This is Biden’s Stock Market, not Trump’s."
Trump added: "I didn’t take over until January 20th. 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!!!"
Objective economists noted the GDP was dragged down by a surge in imports ahead of the Trump tariffs and a reduction in government spending.
Zero Hedge noted: "The former is a temporary impact, the latter is what America voted for!!"
Fox Business host Larry Kudlow said Wall Street and legacy media have a fundamental misunderstanding of the GDP numbers.
“The liberal press and their pals on Wall Street are talking about recession — because the first quarter GDP was scored with a slight decline of three-tenths of 1 percent,” Kudlow said. “Yet if you look under the hood of the GDP report, and carefully parse through the numbers, what you actually come up with is a rather strong economy, that’s growing at something like 3 percent.”
Trump is just 100 days into his term but, Kudlow said, a look "at core GDP — which takes out the fluky trade import numbers from tariff front running and looks at just the heart of GDP, which is private sector consumption plus private sector business investment. Well, looking at core GDP, you see an actual increase in the first-quarter economy — of 3 percent, no less.”
Kudlow said the surge in imports is not a sign of weakness, but of confidence in future demand.
The highlight of the GDP report, in Kudlow’s view, was a massive uptick in business investment.
“Business fixed investment increased nearly 10 percent at an annual rate in the first quarter,” he said. “And, even better, business equipment and machinery — which is an incredibly important harbinger of productivity, job increases, and real wage hikes — rose an incredible 22.5 percent. There’s no recession there.”
Expectations are that Trump’s tax reform package will pass this summer. The administration has proposed 100% expensing for business investment, including factory equipment and buildings, retroactive to Jan. 20, as well as a lower corporate tax rate on domestic production.
“So, what’s actually happening is that businesses are front-running the big beautiful tax cut that will be coming their way,” Kudlow said. “It’s a phenomenal story. It’s a story of reshoring. The business tax cuts — along with the new personal tax cuts for service worker tips, overtime, and seniors’ Social Security benefits — will far outweigh any drag from tariffs.”
The U.S. economy is not stalling — it’s revving up, Kudlow concluded:
“That sets up an economy boosted by tax cuts and deregulation that can roar — perhaps in the second quarter, but certainly by the second half of the year and well into 2026.”
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