The Commerce Department reported Wednesday that the U.S. economy contracted by 0.3% in the first quarter of this year, prompting President Donald Trump to publicly blame Biden. He insisted his own trade policies would soon reverse the downturn and drive strong growth.
Trump said the shrinkage “has NOTHING TO DO WITH TARIFFS” and argued that once tariffs fully kicked in, the economy would “boom.” “When the boom begins, it will be like no other. BE PATIENT!!!” he wrote on social media.
In a longer post on TruthSocial, he added, “This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th. Tariffs will soon kick 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.’
Meanwhile, the President is set to host CEOs from major firms, including Nvidia and GE Aerospace, later today. He will also convene a Cabinet meeting with his leadership team. Trump has been making multiple public appearances to mark his first 100 days in office, which he completed yesterday.
First dip since early 2022 puts the U.S. on the brink of technical recession
The Commerce Department said the latest figure marked a sharp reversal from the 2.4% annual growth rate posted in the final quarter of last year. On the surface, the shift from a 2.4% expansion to a 0.3% contraction was shocking.
Officials noted the downturn largely reflected a surge in imports, as businesses rushed to bring in goods ahead of President Trump’s tariff increases. It was the first contraction in three years, a sign that economic activity was already softening even before the highest tariffs took effect.
This dip, the first since early 2022, places the U.S. economy on the brink of a technical recession, which is typically defined by two straight quarters of negative growth.
Consumer sentiment plunged 32% in April, falling to its lowest level since the 1990 recession. Influential economists had warned that the risk of a U.S. recession this year was close to 50%.
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