On the very day that Donald Trump is set to deliver his State of the Union address to a joint session of Congress, with a disapproval rating of 52 percent according to a CNN poll out on Sunday, the Federal Reserve Bank of Atlanta’s model for predicting U.S. economic growth is flashing red.
The model is known as GDPNow and is highly respected for its accuracy. After an update yesterday based on new, incoming economic data, GDP for the first quarter is predicted to be -2.8 percent. The GDPNow staffers wrote this yesterday:
“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.8 percent on March 3, down from -1.5 percent on February 28. After this morning’s releases from the US Census Bureau and the Institute for Supply Management, the nowcast of first-quarter real personal consumption expenditures growth and real private fixed investment growth fell from 1.3 percent and 3.5 percent, respectively, to 0.0 percent and 0.1 percent.”
Let those figures sink in for a moment.
Real personal consumption expenditures growth cannot fog a mirror; They are effectively dead at zero percent.
For the past half century, 60 percent or more of GDP has come from consumer spending. Since 2007, consumer spending has represented approximately two-thirds of GDP. Most U.S. presidents have kept that reality at the forefront of their thinking and not set out to terrify and horrify the U.S. consumer into an austerity mode in preparation for Armageddon.
According to his official bio, Donald Trump attended the University of Pennsylvania’s Wharton School and graduated with a B.A. in Economics in 1968.
In multiple profiles of Donald Trump in the 1970s, the New York Times reported that Trump had graduated first in his class at Wharton – a narrative in line with Trump’s own vision of himself as a genius.
In preparation for an article that was published in the New York Times on April 8, 1984, writer William E. Geist decided to check the commencement program for Trump’s graduation at Wharton. Geist wrote this:
“And just about every profile ever written about Mr. Trump states that he graduated first in his class at Wharton in 1968. Although the school refused comment, the commencement program from 1968 does not list him as graduating with honors of any kind. He says he never told them that either.”