GDP Shrinkage?

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The Gross Domestic Product for the first quarter of 2025 dropped by 0.3% and the media is saying that this is the negative fallout from President Trump. But not when you drill into the details…

Almost every marker of GDP was UP except Government consumption expenditures and gross investment. Government spending, which was always up during the Biden administration, was down by 1.4% in the first few months of the new Trump administration. Anyone who reads the news would know that. But other measures were up including domestic investment by 21.9% (whoa!), fixed investment, goods and services.

Net exports of goods and services is down, which is to be expected due to tariffs.

The Biden administration was criticized for touting economic growth that was based on government spending. The contraction of the GDP under Trump is clearly based on reduced spending but economic growth outside of the government is impressive.

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