Is America on the verge of a recession? By: RTSG

NEW YORK, March 6 (RTSG) – The Federal Reserve in Atlanta is estimating a GDP shrinkage of -2.5 percent in the first quarter of 2025. While most outlets, including the Blue Chip Consensus, say that growth will remain relatively stable this quarter, Atlanta Fed’s GDPNow has given an ominous estimation of the health of the economy that has shocked both investors and consumers.

New indicators reported that consumers spent less than expected during the uncomfortable January weather and that exports were weak, which led to the downgrade. Prior to last week’s consumer spending report, GDPNow had been indicating growth of 2.3% for the quarter. This coincides with many other variables that might suggest that the economy is entering a slowdown.

The Commerce Department released a report saying that personal spending fell 0.2% in January, falling just below the Dow Jones estimate for a 0.1% increase. However, fully adjusted for inflation, spending fell 0.5%. As a result, that managed to remove a full percentage point off the expected contribution to GDP, down to 1.3%, according to the GDPNow calculation.

More concerning, however, were numbers coming out of the labor market as unemployment claims rose to 242,000, matching early October 2024’s numbers, causing concern among some investors.

Among the major drivers of GDP growth, including consumption, investment, government spending, and net exports, only government spending is remaining relatively stable, despite Elon Musk’s new “Department of Government Efficiency” promising to cut jobs and tighten spending. The U.S. House recently signed off on Trump’s proposed tax cuts and budgetary cuts bill which, if implemented, would sharply decrease government spending by $2 Trillion and loosen tax regulations by $4.5 Trillion.

---

Author
Seraph of RTSG

---

Originally published on RTSG

---

Archives

March 2025
January 2025
December 2024
November 2024
October 2024
September 2024
August 2024
July 2024
June 2024
May 2024
April 2024
March 2024
February 2024
January 2024
December 2023
November 2023
October 2023
September 2023
August 2023
July 2023
June 2023
May 2023
April 2023
March 2023
February 2023
January 2023
December 2022
November 2022
October 2022
September 2022
August 2022
July 2022
June 2022
May 2022
April 2022
March 2022
February 2022
January 2022
December 2021
November 2021
October 2021
September 2021
August 2021
July 2021
June 2021
May 2021
April 2021
March 2021
February 2021
January 2021
December 2020
November 2020
October 2020
September 2020
August 2020
July 2020