The Atlanta Fed’s GDPNow tracker projects a concerning 1.5% decline in GDP for Q1 2025, revised down from a previously projected 2.3% growth. This downward revision stems from weaker-than-expected consumer spending in January and significantly decreased net exports. Further contributing to the negative outlook are decreased consumer confidence, rising inflation concerns, and an increase in unemployment claims. These factors, coupled with an inverted yield curve, suggest a potential recession.
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Jobless claims rose to a three-month high of 242,000 last week, exceeding analysts’ predictions but remaining within the healthy range observed over the past three years. The four-week average also increased, reflecting a slight uptick in layoffs. This increase, however, is anticipated by some economists to be a gradual rise rather than a sudden surge, potentially linked to upcoming government-mandated workforce reductions. Despite this, the broader labor market remains robust, with low unemployment and continued job growth, though at a slower pace than in recent months.
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As I look at the current state of affairs and the impending presidential election, the words of Donald Trump in 2004 echo in my mind: “And it just seems that the economy does better under the Democrats than the Republicans.” History has shown time and time again that Republican administrations have not fared well with the economy, and the prospect of a potential Trump win leading to an economic downturn does not come as a shock.
Looking back on the recessions that have plagued us since the 1950s, it’s glaringly obvious that the Democrats have only one recession to their name, while the Republicans have a whopping ten.… Continue reading
John Q. Hosedrinker