By Daniel Lacalle

The Federal Reserve Bank of Atlanta’s GDPNow model projection for real GDP growth in the first quarter of 2025 (Q1 2025) is now showing a slump to -1.5 percent. This marks a significant downward revision from the previous estimate of 2.3 percent on February 19, 2025.

Such an enormous decline is strange. How did we go from 2.3 percent to -1.5 percent in less than a month? That kind of collapse in an economy as large as the United States is exceedingly rare.

The immediate reaction from the media is to call this the beginning of a “Trump recession” and blame it on President Trump’s policies. Interestingly, on June 1, 2022, the Atlanta Fed GDPNow estimated the second quarter of 2022 growth at 1.3 percent. By July 1, 2022, it had dropped to -2.1 percent, a shift of 3.4 percentage points in 30 days. What did the media call it? “Growth scare”. A similar thing happened in the third quarter of 2021. The estimate fell from 6.1 percent (July 30) to 2.3 percent (October 1), a 3.8-point drop over two months.

In 2022, real GDP declined for two consecutive quarters under Biden’s administration. According to the Bureau of Economic Analysis, the first quarter saw a decrease of -1.6 percent in the annualized rate, followed by a 0.6 percent drop in the second quarter. Hundreds of analysts, commentators, and economists, along with the NBER, swiftly........

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