What does the negative GDP report really tell us? 🤔

A few thoughts regarding an ambiguous headline metric 🇺🇸

As always, we should be wary of gross domestic product (GDP), because its calculation has counterintuitive components and the headline number can send ambiguous signals.

On Wednesday, the Bureau of Economic Analysis (BEA) estimated that real GDP contracted at a 0.3% rate in Q1. This is down from the +2.4% growth rate in Q4 2024.

GDP growth flipped negative for the first time since 2022. (Source: BEA)

There’s lots of great analysis and commentary that’s been published online already. For your convenience, I’ll sum up some key points here.