U.S. President Donald Trump on Wednesday counseled patience, placed blame, and claimed victory all at once in the face of a first quarter U.S. economic contraction and tariffs that have taken a bite out of his popularity, saying a resurgence was on the horizon.
The U.S. Commerce Department's advance gross domestic product (GDP) data on Wednesday indicated the first quarterly decline in three years, as businesses imported a surge of goods to avoid higher costs from Trump's pending tariffs.
Some economists pointed to robust consumer spending and private investment as a sign that growth could soon rebound.
Trump and his aides struggled to coalesce around a message regarding the GDP number, simultaneously stating that it was bad due to Biden administration policies but also good because of Trump's efforts.
"You probably saw some numbers today, and I have to start off by saying that's Biden," Trump said to reporters, without elaborating as he referred to his Democratic predecessor.
He then said the figure was due to "distortions" from imports, inventories and government spending, components that figure into the GDP calculation. He also celebrated a surge in business investment that some economists attribute to tariff-related spending.
"We had numbers that, despite what we were handed, we turned them around and we were getting them really turned around," Trump said during a two-hourlong Cabinet meeting broadcast live.
Earlier, Trump trade adviser Peter Navarro said, "This was the best negative print, as they say in the trade, the GDP – that I've ever seen in my life. It really should be very positive news for America."
Navarro also discounted the GDP number, saying it declined because businesses were buying goods from abroad to avoid tariffs, an idea that clashed with Trump's claim on social media that tariffs played no role in declining stock markets.
The varying explanations came as Trump crossed the symbolic milestone of 100 days in office and polls showed rising public discontent over the Republican's handling of the economy.
A Reuters/Ipsos poll conducted on Sunday showed that 42% of respondents approve of Trump's performance in office, while 53% disapprove. The approval rate stood at 47% in the hours after his Jan. 20 inauguration.
The share of respondents who approve of Trump's economic stewardship declined by one percentage point to 36%, the lowest level in his current term or during his 2017-2021 presidency, while disapproval rose by 5 points to 56%.
Fears of a recession have surged in recent weeks as Trump has launched a global trade war, hiking tariffs so high that economists warn trade with some countries, notably China, could grind nearly to a halt. The moves have shaken investors and companies.
Some private sector economists attributed the first quarter downturn to Trump, not former President Joe Biden, as gross domestic product expanded at an annualized rate of about 2.9% per quarter on average over the second half of Biden's presidency. And some see the stage now set for a recession.
"This isn't going to reverse because of the internal properties of the economy," said Joseph Brusuelas, chief economist with consulting firm RSM US LLP. "This is all policy induced, so unless the tariffs are walked back rapidly, it's just simply going to be too late to avoid an economic downturn."
He added: "We'll be talking about a recession starting around midyear."
Democrats were quick to seize on the economic uncertainty and lay blame squarely on Trump.
"This is not Joe Biden's economy, Donald, it is your economy," U.S. House Minority Leader Hakeem Jeffries said on Wednesday, standing alongside fellow Democratic lawmakers. "It is the Trump economy, it is a failed economy and the American people know it."
On Wednesday, Trump blamed the sliding stock markets on Biden on social media, but later said he was neither taking credit nor "discrediting" the market performance.
During the lengthy Cabinet meeting, several of Trump's aides took turns praising Trump's economic policies.
"American families are finding their financial footing again," said U.S. Treasury Secretary Scott Bessent, adding that Trump was going to make the country an artificial intelligence and manufacturing superpower.
Bessent also said the country was experiencing lower mortgage rates, food costs and energy prices.
Benchmark 30-year mortgage rates are roughly the same as when Trump won the election in November, while food prices are rising at a 3% annualized rate and energy prices are falling by the same rate, according to the U.S. Bureau of Labor Statistics.
