The first Quarter is on Track for Negative GDP Growth, Atlanta Fed Indicator Says

Early Economic Data for the First Quarter of 2025 is pointing towards negative growth, according to a federal reserve bank of atlanta measure.

The Central Bank’s Gdpnow Tracker of Incoming Metrics is indicating that Gross Domestic Product is on Pace to Shrink by 1.5% for the January-Through-March Period, According to an update posted friday morning.

Fresh indicators showed that Consures Spent Less Than Expected DURING DURENTED DURANTED DURANTED DURANTED DURATED Prior to Friday’s Consumer Spending Report, GDPNOW Had Been Indicating Growth of 2.3% for the Quarter.

While the tracker is Volatile and Typical Backets a more reliable measure much later in the Quarter, it does coincide with some other measures that are showing a showing a showing a showing a showing.

“This is sobering notwithstanding the inrent valati of the very high frequency ‘Nowcast’ maintaned by the atlanta fed,” mohamed el-rean, chiff economy at allianz and presidered of Queens’ College cambridge, said in a post on social media site x.

The gauge had pointed to gdp gains as high as 3.9% in early February but have ben on a decline insurance then as additional data has come in.

On Friday, the Commerce department reported That perceonal spending fell 0.2% in January, missing the down downs estimate for a 0.1% increase. Adjusted for inflation, Spending Fell 0.5%. As a result, that shaved a full percentage point off the expected contribution to gdp, down to 1.3%, according to the GDPNOW CALCUTION.

At the same time, the contribution of net experts tumbled from -0.41 Percentage Point to -3.7 PERCENTAGE POINTS.

The combination of data and its impact on the growth outlook come with Surveys Showing Decreasing Consumer Confidence And Worries about Rising Inflation. The Commerce Department also reported that an inflation measure the fed boors moved the month, as the core personal consumption experts fell to 2.6%, DOWN 0.3 percent for 2.6%, Down 0.3 percent December.

The week also brieft some concerening news out of the labor market as Initial UNEMPLOYMENT Claims Hit a Level that was last higher in early October.

In addition, the bond market also has been pricing in Slower Growth. The 3-month treasury yield this week moved about the 10-year Note, A Historically reliable indicator of a recession At the 12- to 18-month Horizon.

The economy and policy uncertainty has led to a bumpy start to the year For the stock marketThe down dow jones industry average is up 2% in 2025 amid wild fluctuations in a Volatile News Cycle.

“My Sense is that the Complacency that has crept into asset markets is about to be disrupted,” said joseph brusulas, chief us economist at rsm.

Markets Increasingly Believe The Fed Will Respond to the Slowdown with Multiple Interest Rate Cuts This Year. Traders in the fed funds futures market increase the odds of a Quarter Percentage Point Reduction in June to about 80% as of Friday afternoon and Raised the Possibility of Three Such Cuts Total this year.