U.S. Economy Shrank In Trump's First 100 Days

WASHINGTON — The U.S. economy shrank in the first three months of President Donald Trump’s second term in the White House, according to a preliminary estimate released Wednesday. 

Gross domestic product, a measure of overall economic activity, shrank by 0.3% in the first quarter of 2025, the U.S. Commerce Department said in a release, after having increased 2.4% at the end of last year. 

The decline in economic activity doesn’t mean the economy is in recession, but it’s a warning sign as Trump forges ahead with a regime of tariffs on imported goods that economists say could raise prices, crush growth and spike unemployment. 

And the report is politically damaging to Trump, who won reelection thanks in large part to voter anger over inflation but has seen his approval ratings slide as voters lose patience with his stewardship of the economy. 

The president offered a defensive reaction to the news, blaming the bad numbers on his predecessor in the White House, Joe Biden. 

“This is Biden’s Stock Market, not Trump’s,” Trump posted on Truth Social on Wednesday morning, before the stock market had opened. (Stocks plummeted once trading began.)

“I didn’t take over until January 20th,” Trump continued. “‘Tariffs will soon start kicking 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.’”

The Commerce Department said the negative growth resulted from an increase in imports, which subtract from GDP, alongside a decrease in federal spending and a slowdown in consumer spending. 

“Most worrisome is the weak growth in consumer spending, and that is despite the boost to buying as consumers rushed to get ahead of the tariffs,” Mark Zandi, chief economist with Moody’s Analytics, wrote on social media. “The economy isn’t in recession, but is on the precipice.”

Negative growth can signal a recession, but the criteria are broader and there has to be a significant increase in unemployment. The unemployment rate in March ticked up a tenth of a percentage point to 4.2%, which is still historically low; the Labor Department will release new numbers for April on Friday. 

Democrats seized on the GDP report as further evidence of Trump’s economic incompetence after his repeated tariff announcements have sown confusion, hesitation and consternation throughout corporate America. 

“Donald Trump has done something truly remarkable — in just 100 days, he’s taken a strong economy and driven it toward a recession,” Rep. Brendan Boyle (D-Pa.) said Wednesday. “This GDP report ends the myth that he can be trusted on the economy. Families are struggling and now our economy is actually shrinking. His reckless tariffs have incited a trade war, and middle-class Americans are paying the price.”

Wednesday’s report also offered bad news on inflation, with the personal consumption expenditures price index rising 3.6% so far this year after going up only 2.4% at the end of last year.

In his Truth Social post, Trump said his economic plans will take a while and that people should “BE PATIENT!!!”