US GDP stands 12% above the level recorded before the pandemic, and the first‑quarter advance estimate arrives on April 30 as markets weigh tariff effects.
Per Trading Economics, consensus now points to a 0.9% quarter‑on‑quarter annualised expansion, a sharp deceleration from the 2.4% pace logged in Q4 2024.
Looking back over the past five years, the Bureau of Economic Analysis data shows that output fell 9.2% between 2019 Q4 and the lockdown trough in 2020 Q2, regained its pre‑COVID level by 2021 Q2, and climbed to $23.54 trillion in chained‑2017 dollars last quarter.
| Quarter (chained 2017 $) | Billions, SAAR | % vs. pre‑COVID high (2019 Q4) |
|---|---|---|
| 2019 Q4 (pre‑COVID peak) | 20,985.4 | – |
| 2020 Q2 (lock‑down trough) | 19,056.6 | −9.2% |
| 2020 Q3 (initial rebound) | 20,548.8 | −2.1% |
| 2021 Q2 | 21,389.0 | +1.9% |
| 2024 Q4 (latest) | 23,542.3 | +12.2% |
That puts real GDP about two percentage points below the pre‑pandemic trend line implied by 2012‑19 growth, leaving a modest gap even after four years of expansion.
Household spending and government outlays carried most of the gains in late 2024, while private inventories subtracted slightly, suggesting momentum was already rotating toward less cyclical components.
Tariff pulse and forecast risk
However, the backdrop of economic policy has shifted significantly since January. On April 2, the White House unveiled “Liberation Day” duties, imposing a baseline 10% tariff on most imports and effective levies of up to 145% on Chinese goods; retailers met President Trump on April 21 to outline the cost pressure.
An executive order issued on April 8 raised the ad‑valorem rate on low‑value Chinese imports to 90% beginning May 2. Companies from Walmart to Ford have already flagged price increases.
Because the tariffs took legal effect after the March 31 quarter‑end, direct price and volume adjustments will land mainly in Q2 data.
Q1 could still register indirect effects: importers appear to have front‑loaded shipments in March to beat the April deadline, likely boosting goods imports and trimming net‑export growth. Some of those inflows may swell warehouse stocks, tempering the drag from inventories that capped headline GDP in Q4.
Any tariff‑driven pull‑forward would therefore create a mixed arithmetic, higher imports lower real GDP through net trade, but larger inventory accumulation adds back.
Data points to two quarters of negative GDP growth
Trading Economics’ 0.9% call implies roughly a 2.2 percentage‑point slowdown, consistent with a one‑time hit from net trade but not with a broad domestic retrenchment.
The model embeds customs‑duty schedules in its import‑price series, yet it cannot fully capture behavioural shifts by firms and households that will evolve through the spring.
As a result, the upcoming print may test whether consensus has discounted only the mechanical trade subtraction or has accurately gauged demand brought forward from later quarters.
If goods imports indeed spike, Q1 GDP could undershoot the TE figure, setting a lower base for Q2 when the tariff‑induced price pass‑through begins.
Conversely, if business sentiment were to remain firm and inventory building offset the trade gap, the release may top the 0.9% projection, leaving forecasters to reassess how fast the new duties feed through.
However, current evidence suggests weakening business sentiment and only a modest inventory build, far too small to neutralise the tariff‑driven hit to net exports that is already showing up in Q1 activity.
The Atlanta Fed GDPNow tracker (17 Apr) actually puts Q1 growth at –2.2 % SAAR. Net exports are down –4.9 ppts (import pull‑forward) while the change in private inventories is up just +0.33 ppt.
Current projects for GDP
Unless the data turns sharply in May‑June, the probability that firm sentiment plus inventories will fully offset the trade gap before we see the Q2 GDP release is low (perhaps 20‑30 %).
Net trade is roughly fifteen times bigger than the inventory add‑back. Federal Reserve Bank of Atlanta. Even if inventories continued to accumulate in April‑May at twice February’s pace, they would still offset only a fraction of the trade subtraction.
The more plausible path is a soft or even negative Q1 figure (below the 0.9 % consensus) followed by a Q2 rebound in net exports as imports drop, but inventories then swing from a mild plus to zero or negative, leaving overall growth subdued.
Investors and forecasters should therefore focus less on an inventory cushion and more on the speed and breadth of tariff pass‑through to prices and demand over the summer.
Either way, the April 30 data point will provide the first numerical read on a policy shift whose full macro effect will not emerge until mid‑summer.
A recession is defined as two quarters of negative GDP growth, so if next week’s print comes out negative, then all eyes will be on Q2 to confirm or deny a technical recession.
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