US economy is shrinking: Trump blames Biden for the slump!

US economy is shrinking: Trump blames Biden for the slump!

The US economy contracted in the first quarter of 2023, recent reports from the Commerce Department confirm. Accordingly, the gross domestic product (GDP) shrank by 0.2 percent between January and March. These figures show a negative development and are in contrast to the initial estimate at the end of April, which predicted a decline of 0.3 percent. A worrying signal that calls into question the country's economic stability, especially after the progress that the US economy has made in recovering from previous crises, as Statista points out.

In the first few months of the year, investment in the USA fell more than expected. While investments tend to have positive effects on the economy, these have been partially negated by downward revisions in consumer spending. President Donald Trump blamed his predecessor Joe Biden for this economic setback and experts highlight the “first signs of skids” in Trump’s tariff policy. In a further step, a US trade court in New York stopped the tariffs imposed by Trump on numerous countries and ordered them to be lifted. The government responded immediately and appealed this decision.

Investments and expectations

Despite the decline in GDP, the US economy remains robust by global standards. Recovery from crises has occurred more quickly than many Western economies, although growth lags behind G20 emerging economies such as India and China. According to Statista, over 60 percent of respondents expressed positive expectations regarding economic development since the end of 2021.

Consumer spending, government spending and exports have increased. Infrastructure initiatives have a significant impact on government spending, which has a positive impact on the overall economy. For 2024, the US GDP is estimated to be around $29.2 trillion. This forecast is supported by investment programs and low unemployment, which promote economic growth.

Industries and GDP data

The industrial sectors recorded increases in gross value added of between five and nine percent in 2023, with services making a significant contribution. The largest sector remains finance, insurance and real estate, which reached $5.65 trillion in 2023. California leads with a GDP of around $3.86 trillion, while the District of Columbia has the highest GDP per capita.

• New York: BIP pro Kopf rund 109.971 US-Dollar
• Vermont: geringstes BIP rund 43,1 Milliarden US-Dollar
• Mississippi: niedrigstes BIP pro Kopf rund 49.801 US-Dollar

Projections for the unemployment rate in 2024 are around 4.1 percent, while the employment rate remains at around 60.1 percent, compared to 60.8 percent before the pandemic. At around 80 percent, services represent the largest sector of the labor market.

With an average annual income of around 80,115 US dollars and a median household size of 80,610 US dollars, there is an unequal distribution; 21 percent of households earn less than $35,000. At the same time, US disposable income is estimated to be around $20.2 trillion in 2023. Nevertheless, inflation will continue to be a key economic issue at 4.1 percent for 2023 and an estimated 3 percent for 2024.

The trade balance shows a deficit of around 1.15 trillion US dollars, as imports of around 3.2 trillion US dollars significantly exceed exports of around 2.02 trillion US dollars. Mexico has established itself as the USA's most important trading partner in goods trade.

It remains to be seen how the economic situation will develop in the future, particularly under the influence of political decisions and global economic conditions.