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gross domestic product
'Growth Has Simply Vanished': Under Trump, US Economy Shrinks for First Time Since 2022
"Our economy is crumbling under President Trump's mismanagement," said the head of one progressive group.
Apr 30, 2025
The United States economy decelerated during the first quarter of 2025, as businesses braced for sweeping tariffs from U.S. President Donald Trump, according to a Wednesday "advance estimate" from the U.S. Bureau of Economic Analysis—marking the first contraction of the country's real gross domestic product since 2022.
Real GDP declined at an annual rate of 0.3% in January, February, and March of 2025, according to the report. That headline figure is a dramatic turn around from the final quarter of 2024, when real GDP increased 2.4%.
According to the report, "the decrease in real GDP in the first quarter primarily reflected an increase in imports... and a decrease in government spending." When calculating GDP, imports are subtracted, meaning more imports will yield a lower number.
A number of outlets have cautioned that the 0.3% contraction figure is somewhat misleading. Axiospointed to solid business investment and consumer spending data in the report as evidence "signaling at least some underlying momentum in the economy—at least once volatile measures like trade are stripped out." The New York Timesoffered similar analysis.
But even with this caveat, the economic picture is less than rosy. "Maybe some of this negativity is due to a rush to bring in imports before the tariffs go up, but there is simply no way for policy advisors to sugar-coat this. Growth has simply vanished," said Chris Rupkey, chief economist at Fwdbonds.
Several observers were quick to point the finger at the Trump administration.
"Our economy is crumbling under President Trump's mismanagement, and today's falling GDP data confirms our slide toward a recession," said Lindsay Owens, the executive director of the progressive group Groundwork Collaborative. "Trump is creating the conditions for a particularly brutal recession."
"It turns out that when you launch a trade war with blanket tariffs, layoff federal workers en masse, cancel federal contracts, and reduce skilled immigration, you will have negative GDP growth," wrote Rep. Ro Khanna (D-Calif.) on X.
Rep. Don Beyer (D-Va.) said that "Trump's chaos is clearly and significantly raising the risk of a recession, and the economic warning lights are all flashing red."
In response to the release, markets slipped on Wednesday.
Trump, for his part, took to his social media site Truth Social on Wednesday to say that "This is Biden's Stock Market, not Trump's." He added that "tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers … 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."
Economists say they think Wednesday's numbers are related to tariffs. According to reporting from the Times, the main takeaway from the report is that consumers and businesses started to modify their behavior even prior to Trumps "Liberation Day" tariffs on April 2, which rattled markets.
A surge in the trade deficit edged GDP into negative territory, said Dean Baker, senior economist for the left-leaning economic think tank the Center for Economic and Policy Research, in a statement on Wednesday. "This was due to massive stockpiling of inventories and purchases of durable goods in anticipation of tariffs."
"The negative GDP number could also mean the end of the big upswing in productivity growth under Biden. This is bad news for both real wage growth and inflation," continued Baker.
"No surprise that GDP took a hit in the first quarter, mainly because the balance of trade blew up as companies imported goods like crazy to front-run tariffs. The more telling number for the future of the expansion was consumer spending, and it grew, but at a relatively weak pace," said Robert Frick, corporate economist with Navy Federal Credit Union, according to CNBC.
Wednesday's report also registered increased inflation. The personal consumption expenditures price index, the Federal Reserve's favored inflation gauge, registered a 3.6% gain for Q1, up from 2.4% in the final quarter of last year.
The numbers from the Bureau of Economic Analysis come a day after reports of consumer confidence in April dipping to lows not seen since early in the COVID-19 pandemic.
There is still major economic data set to be released this week. On Friday, the U.S. Bureau of Labor Statistics will release its jobs report for the month of April.
This article was updated with a comment from Rep. Don Beyer (D-Va.).
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Economic Growth Is the World’s Most Dangerous Game
The game of growth has convinced us that the only way we can win is to continue to play.
Dec 14, 2024
In Richard Connell’s popular short story “The Most Dangerous Game,” hunter Sanger Rainsford goes overboard while sailing to the Amazon, washing up on an island owned by deceivingly charismatic General Zaroff. Rainsford expects Zaroff to help him off the island, but instead, Zaroff invites him to participate in a hunt.
A hunt, to Rainsford’s utter disbelief, in which he is the prey.
Our reckless pursuit of economic growth has become society’s “most dangerous game.” It keeps us trapped on an island of inequality, environmental degradation, and corporate power, all while convincing us there’s still a chance we can win if we continue to play.
To win this game, we can’t keep playing by the rules, but rewrite them entirely. We can start by challenging one of the most dominant rules of the growth model: Gross Domestic Product (GDP).
But there is no “winning” in a game dependent on the exploitation of people and nature. As long as “growth” is defined by profits and production, people and the planet will always lose.
That is, unless you are one of the few Zaroffs of the world: According to an Oxfam report, the world’s top 1% own more wealth than 95% of humanity, and over the past 30 years, income inequality has steadily risen to the point where many economists believe wealth is more stratified today than any time since the Gilded Age.
If economic growth doesn’t deliver its promised benefits, then why do we continue to play? Because those who preach economic growth as a path to prosperity—usually the same people who bag the most benefit—have engineered a game of forced “choice:” Hunt, or be hunted. As Zaroff explains to Rainsford, “I give him his option, of course.” But if they decline, he hands them over to his servant for torture. “Invariably,” Zaroff muses, “they choose the hunt.”
The same logic is used to silo economic and environmental objectives, perpetuating the false premise that reducing poverty and raising living standards must come at the cost of climate action. Such “choice” is equally manufactured—if economic growth is truly a means of improving societal well-being, shouldn’t actions that secure and sustain access to basic necessities be a vital part of our economy?
Even Americans seem to agree that economic growth is an incomplete measure of prosperity. In a nationally-representative survey of 3,000 participants, conducted by survey organization Verasight between October 21 and November 5, only 12.8% (with a 2.3% margin of error) responded that economic growth is a “mostly accurate” way of assessing societal well-being. The rest were skeptical, with 50.8% calling it “somewhat accurate” and 36.5% deeming it inaccurate altogether.
And yet, despite the dissatisfaction, dissonance, and destruction that our economic model begets, pundits and policymakers “invariably” brandish growth as the hallmark of prosperity. Meanwhile, the Zaroffs of the world continue to indulge their unchecked appetite for profit, capitalizing off the preservation of the status quo.
To win this game, we can’t keep playing by the rules, but rewrite them entirely. We can start by challenging one of the most dominant rules of the growth model: Gross Domestic Product (GDP).
GDP is a measure of aggregate production, not a reflection of progress and well-being. It excludes the costs of pollution and exploitation and ignores 16.4 billion hours of unpaid labor, much of which is performed by women. It also omits many non-materialistic goods (health, family, and equality) that define happiness and quality of life. In fact, economists have always warned against conflating GDP with societal well-being—even one of its founders, Simon Kuznets, told Congress that GDP was a poor tool for policymaking.
As Robert Kennedy put it in his 1968 election speech, GDP “measures everything in short, except that which makes life worthwhile.” By adopting more inclusive measures of progress that consider health, equality, and environmental well-being, we can move beyond the flawed metric of GDP as a measure of prosperity. In doing so, we build economies that prioritize people and the planet instead of outrageous profits.
Such measures are already gaining traction in the U.S. and across the globe. For example, India’s Ease of Living Index assesses the well-being of 114 Indian cities, using a total of 50 indicators that fall under three pillars: Quality of Life, economic ability, and sustainability. At the international scale, the United Nations is working to advance a “Human Rights Economy” that anchors all economic decisions in human rights. In the U.S., Vermont became the first state to adopt an alternative to GDP called the “Genuine Progress Indicator” in 2012, shortly followed by Maryland and 19 other states.
These measures aren’t perfect, nor should they be the only way we address a system that continues to inflict irreparable damage on global ecosystems and communities. However, they play a crucial role in disrupting our current growth paradigm, establishing an economic model where well-being isn’t exclusive to the wealthy, and where societal and environmental objectives are aligned.
It’s time we expose the injustices of our economic system, rewrite the rules, and beat the Zaroffs of the world at their own game.
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Congressional Report Calls Trump Deportation Plan 'Catastrophic' for Economy
"All it will do is raise grocery prices, destroy jobs, and shrink the economy," JEC Chair Martin Heinrich said of the president-elect's plan to deport millions of immigrants.
Dec 12, 2024
Echoing recent warnings from economists, business leaders, news reporting, and immigrant rights groups, Democrats on the congressional Joint Economic Committee detailed Thursday how President-elect Donald Trump's planned mass deportations "would deliver a catastrophic blow to the U.S. economy."
"Though the U.S. immigration system remains broken, immigrants are crucial to growing the labor force and supporting economic output," states the new report from JEC Democrats. "Immigrants have helped expand the labor supply, pay nearly $580 billion a year in taxes, possess a spending power of $1.6 trillion a year, and just last year contributed close to $50 billion each in personal income and consumer spending."
There are an estimated 11.7 million undocumented immigrants in the United States, and Trump—who is set to be sworn in next month—has even suggested he would deport children who are American citizens with their parents who are not and attempt to end birthright citizenship.
Citing recent research by the American Immigration Council and the Peterson Institute for International Economics, the JEC report warns that depending on how many immigrants are forced out of the country, Trump's deportations could:
- Reduce real gross domestic product (GDP) by as much as 7.4% by 2028;
- Reduce the supply of workers for key industries, including by up to 225,000 workers in agriculture and 1.5 million workers in construction;
- Push prices up to 9.1% higher by 2028; and
- Cost 44,000 U.S.-born workers their jobs for every half a million immigrants who are removed from the labor force.
Highlighting how mass deportations would harm not only undocumented immigrants but also U.S. citizens, the report explains that construction worker losses would "make housing even harder to build, raising its cost," and "reduce the supply of farmworkers who keep Americans fed as well as the supply of home health aides at a time when more Americans are aging and requiring assistance."
In addition to reducing home care labor, Trump's deportation plan would specifically harm seniors by reducing money for key government benefits that only serve U.S. citizens. The report references estimates that it "would cut $23 billion in funds for Social Security and $6 billion from Medicare each year because these workers would no longer pay into these programs."
Sen. Martin Heinrich (D-N.M.), who chairs the JEC, said Thursday that "as a son of an immigrant, I know how hard immigrants work, how much they believe in this country, and how much they're willing to give back. They are the backbone of our economy and the driving force behind our nation's growth and prosperity."
"Trump's plan to deport millions of immigrants does absolutely nothing to address the core problems driving our broken immigration system," Heinrich stressed. "Instead, all it will do is raise grocery prices, destroy jobs, and shrink the economy. His immigration policy is reckless and would cause irreparable harm to our economy."
Along with laying out the economic toll of Trump's promised deportations, the JEC report makes the case that "providing a pathway to citizenship is good economics. Immigrants are helping meet labor demand while also demonstrating that more legal pathways to working in the United States are needed to meet this demand."
"Additionally, research shows that expanding legal immigration pathways can reduce irregular border crossings, leading to more secure and regulated borders," the publication says. "This approach is vital for managing increased migration to the United States, especially as more people flee their home countries due to the continued risk of violence, persecution, economic conditions, natural disasters, and climate change."
The JEC report followed a Senate Judiciary Committee hearing on Tuesday that explored how mass deportations would not only devastate the U.S. economy but also harm the armed forces and tear apart American families.
In a statement, Vanessa Cárdenas, executive director of the advocacy group America's Voice, thanked Senate Judiciary Committee Chair Dick Durbin (D-Ill.) "for calling this important discussion together and shining a spotlight on the potential damage."
Cárdenas pointed out that her group has spent months warning about how Trump's plan would "cripple communities and spike inflation," plus cause "tremendous human suffering as American citizens are ripped from their families, as parents are separated from their children, or as American citizens are deported by their own government."
"Trump and his allies have said it will be 'bloody,' that 'nobody is off the table,' and that 'you have to send them all back,'" she noted, arguing that the Republican plan will "set us back on both border control and public safety."
Cárdenas concluded that "America needs a serious immigration reform proposal—with pathways to legal status and controlled and orderly legal immigration—which recognize[s] immigrants are essential for America's future."
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