After Just 4 Months Under Trump, Fed Predicts GDP Spike for Current Quarter

Conservative News DailyJune 3, 2025

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The Atlanta Federal Reserve has recently revised its forecast for the Gross Domestic Product (GDP) growth for the second quarter of 2025, predicting a significant increase to 4.6% from a previous estimate of 3.8%. This adjustment follows a period where experts had anticipated another decline in GDP, raising concerns about a potential recession. the revision is attributed to improvements in consumer spending and private domestic investment,which have increased considerably. Economists, including E.J. Antoni from the Heritage Foundation, noted that the positive adjustments reflect changes in the trade deficit and a rebound in consumer spending.Additional favorable economic indicators include a decrease in inflation measures, with the personal consumption expenditures price index falling to 2.1% and the consumer price index dropping to its lowest since early 2021. these developments suggest a stronger-than-expected recovery for the U.S. economy in the second quarter.

The Atlanta Federal Reserve Bank is now predicting a whopping 4.6 percent growth in the Gross Domestic Product for the second quarter, which ends June 30.

Fox Business Network host David Asman posted on X, “Just a few weeks ago, the ‘experts’ were warning of another negative GDP quarter, with a recession looming. Now this: ‘Atlanta Fed GDP now growth estimate for Q2 rises to 4.6% from 3.8%.’”

Just a few weeks ago the “experts” were warning of another negative GDP quarter, with a recession looming. Now this:

“Atlanta Fed GDP now growth estimate for Q2 rises to 4.6% from 3.8%” https://t.co/ZyZtOAAsc1

— David Asman (@DavidAsmanfox) June 3, 2025

He d a Monday story from ForeXLive showing the Fed’s GDP adjustment.

“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2025 is 4.6 percent on June 2, up from 3.8 percent on May 30,” the report said.

“After this morning’s releases from the US Census Bureau and the Institute for Supply Management, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth increased from 3.3 percent and -1.4 percent, respectively, to 4.0 percent and 0.5 percent.”

Heritage Foundation economist E.J. Antoni also commented on the upward adjustment, posting on X, “ATL Fed: guess we found all the ‘missing’ imports as not only does the trade deficit shrink after the Q1 explosion, but now the estimate for consumer spending is shooting up and investment has flipped positive; Q2 GDP estimate is now a whopping 4.6%.”

ATL Fed: guess we found all the “missing” imports as not only does the trade deficit shrink after the Q1 explosion, but now the estimate for consumer spending is shooting up and investment has flipped positive; Q2 GDP estimate is now a whopping 4.6%… pic.twitter.com/zgWQJuuIr9

— E.J. Antoni, Ph.D. (@RealEJAntoni) June 2, 2025

In April, when it was reported that the GDP had contracted 0.3 percent in the first quarter, Antoni was among the economists arguing that it was an anomaly based on a spike in imports by businesses trying to get ahead of President Donald Trump’s tariffs.

Shannon Grein, an economist at Wells Fargo, told The Wall Street Journal at the time regarding the Q1 GDP report, “The headline decline overstates weakness because a lot of that was tariff-induced pull-forward.

“Overall, I think that it was a relatively solid underlying report when it comes to demand,” she added.

Antoni had posted on X at the time, “The flood of imports from Q1 is going to tank imports for Q2/Q3, which will show up as faster GDP growth in the Q2 report; ATL Fed and NY Fed are both forecasting significant improvements in growth at 2.5% and 2.72%, respectively.”

The flood of imports from Q1 is going to tank imports for Q2/Q3, which will show up as faster GDP growth in the Q2 report; ATL Fed and NY Fed are both forecasting significant improvements in growth at 2.5% and 2.72%, respectively: https://t.co/GTSx5w8tgU pic.twitter.com/WnbPFf4ckx

— E.J. Antoni, Ph.D. (@RealEJAntoni) April 30, 2025

So, since Antoni posted that in April, the Atlanta Fed has adjusted its estimate from 2.5 percent to 4.6 percent growth.

Also boding well for the U.S. economy, last month the Labor Department reported that the personal consumption expenditures price index — the Federal Reserve’s key inflation measure — fell to 2.1 percent in April.

Further, the U.S Bureau of Labor Statistics reported the consumer price index fell to 2.3 percent in April, the lowest since February 2021, which was before the Democrats passed the $1.9 trillion American Rescue Plan.

CNBC: Personal income increased 0.8% in April — “almost TRIPLE the expectations.” 🔥

“They’re powerful numbers — up 0.6% in January, up 0.7% in February, up 0.5% last month, up 0.8% this month. This is a GREAT four-month start to any year.” pic.twitter.com/s1Rx1KAYFl

— Rapid Response 47 (@RapidResponse47) May 30, 2025

CNBC’s Rick Santelli noted that as inflation continues to ease under Trump, personal income increased by 0.8 percent in April, “almost triple the expectations.”