Several key economic reports were released today highlighting a broad and strong U.S. economy with a very strong labor market.
♦ The first quarter Gross Domestic Product (GDP) was released by the Bureau of Economic Analysis (BEA) [DATA HERE] The first estimate is for growth at 2.0 percent. At first glance that is lower than we expected; however, a deeper look shows a large increase in imported goods that are deductions to the equation. The imported goods increased 25.8% more than the fourth quarter of 2025 [Table 1.1], that led to a net -1.30 percent deduction [Table 1.5].
The jump in imports is a result of massive capital expenditures on tools and equipment for the ongoing manufacturing boom. All the manufacturing machines and industrial tools that are not made in the USA become imported goods deducted from our economic valuation.
Exports were very strong rising 12.9 percent over the prior quarter. However, the 25.8% increase in imports created a net deduction from GDP (-1.30%). The last time we imported this much was just before the tariffs went into place and companies were rushing advanced orders, in the first quarter of 2025; this created a rebound effect in the second quarter.
I estimate the second quarter rebound will be even greater this year because we are exporting massive amounts of oil and LNG right now. Simultaneously, the capital expenditure imports will likely soften.
GDP Table 1.1 highlights the jump in imports. (Percent change vs prior quarter):
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GDP Table 1.5 highlights the impact on overall GDP Calculations: -2.62 imports +1.32 exports = -1.30 net deduction.
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♦ Meanwhile the Dept of Labor (DoL) weekly report on unemployment claims showed U.S. jobless claims have dropped to their lowest level in more than 50 years. According to the U.S. Department of Labor, initial applications for unemployment benefits fell by 26,000 to 189,000 for the week ending Friday (April 25), far below the 214,000 new claims analysts had expected. [DATA HERE] This marks the lowest number of new filings since September 1969.
We continue to see the trend where halted illegal migration and ongoing deportation operations are driving up wages and bringing people off the sidelines for work. The jobless claims reflect a stable and growing economy and strength in employment.
♦ The Mid-East gulf oil crisis is keeping oil prices high which has led to an increase in overall energy and gasoline prices. This is boosting the inflationary numbers; however, the optimistic perspective is that these price increases will subside in the longer term as the Iran issue is resolved.
Funny how “experts” like to exclude energy prices from their economic analysis of inflation when they are falling but put them front and center when they are rising, especially when President Trump is at the helm.
I am a little less optimistic that imports fall next quarter all that much. The large AI build out is requiring 100s of billions in chip imports from Taiwan. All the main buyers (Meta, Amazon, Apple, Google) just announced massive CapEx increases on top of already huge numbers.
Transportation Engineer here. (Truck driver)
Flatbed trailers are the equipment used (far and away) to move Industrial component freight.
“Flatbed” is on fire!!
All day long, on the highways and byways, I see Rebar, angle Iron, Pipe, Copper, Flat Rolled Steel/Aluminum, Industrial Grade Glass, Huge Factory Condensing Cooling units, and much, much more.
The “Tender rejection rate” for Flatbeds (previous contracts rejected in favor of more lucrative ventures) is going vertical.
Many states (Maine, Connecticut, Idaho, Oregon, Washington, etc) are having a rough time coming to grips with having to offer substantially more $$$ for someone to show up with a Flatbed trailer to haul their freight.
Again, the Midwest, is especially busy for Flatbed.
Things are being built there.
Big things.
Once those big things are up and running, they will need a work force.
The light at the end of the tunnel is Rollin into town…
🚚Toot🚛Toot🚚
I live less than 5 miles from the giant hole in the ground that is supposed to be the future Intel mfg facility. They were slow walking the construction until recently. Hoping its up and running very soon!
High quality heavy equipment (big, powerful tools that can get the job done right) are understandably in high demand (seen a bunch of them rollin along, as well).
They are contracted to be in a certain place for a set period of time.
This large equipment is usually very heavy; wider or longer than the Flatbed they sit on; require permits (per state) to travel, and that travel time may be restricted to daylight hours or law enforcement escort.
Many moving parts.
Also, all the heavy equipment (industrial building stuff, Rebar, pipes, copper, too) needs to be choreographed (if you will) to arrive on time and depart the construction site when their task is completed.
Would be prudent to make sure all the ducks are in a row before starting that process.
The most difficult heavy equipment to pin down (for a defined period) doesn’t come cheap. And the next customer that has contracted this equipment (300 miles away) is standing at their hole in the ground, hands on hips and an eye on the horizon! (Insert Mr Bean Gif here 😄)
It can get complicated.
And pricey.
Once the job is done, the most in demand (and most difficult to wrangle) equipment is loaded up and moves to the next gig.
The giant hole in the ground you mentioned, may have been waiting for bureaucratic reasons, or the specific equipment/supplies availability, or both. Dunno.
“Transportation Engineer here. (Truck driver)…” It is always nice to hear from someone who does real work. Thanks!
Most Welcome, Greg
I’ve gotten more out of it than I’ve put into it.
(Except for the Flatbed years.. lol)
good point touching on the phenomena of “regulatory redistribution”
Here in Arizona it’s the same flatbeds with drywall cement blocks going by every day my own unincorporated town of San Tan Valley is soon to become an official and largest city in Pinal County and the powers to be are thinking of building a new downtown
Interesting…are you near Queens Creek?
I ask because we will be snooping” around Arizona later this year with an intent to buy if we can find something that fits.
As Canadians we are we are familiar with Scottsdale but not much else and it is a bit pricey
Cheers!
Indeed, JJ.
Flatbeds will bring in the building blocks.
Sounds like there is going to be some serious growth in-between Phoenix and Casa Grande!
Back in the day, used to deliver rolled aluminum to the soda plant in Casa Grande.
Seemed kinda quiet out your way.
Times are changing, I reckon.
You have my respect.
Stepdad was an over the road driver with a CDL for a long time. Pulled lots of trailers just about everywhere east of the Mississippi over the years with different outfits.
Then did some more local hauls for a few more years out of Wichita.
When I first met him some 30+ years ago he was hauling wood chips to the papermill in Central Maine.
Thanks for that detailed logistics breakdown.
Gasoline by me just had a strong growth in price….
It hit $4.99.9 pr gallon…in the SW burbs of Chicago…a forty cent jump overnight…so yeah…strong energy./s
We did not have that kind of growth in price during the Obama years.
Yet, our GDP missed estimates by a mile yesterday.
Success is no mistake.
Sound the trumpets, Blast it everywhere as people need to see how things are improving. This should be the beginning of a series of great news regarding the economy, If Iran settles everything should explode up leading to the mid terms. Yep I’m a optimist.
Way to go Trump.
Dems heads are going to explode as we go into Q2, ahead of our 250 celebration year.
I have a recent grad in IT. Very tough job market for them.
Unfortunately IT has become over saturated with college grads the past 15 years.
That’s a tough market to make good money now.
I was in the animation business years ago and because of 3d animated art plus the knowledge of computers my job was expendable.
You don’t need to know how to draw anymore to do that kind of work.
Sadly, no problem if you are from India…
See my link above, these companies favor the Indians in such a manner that they set up a sorting in the website application process that rules out non Indians.
Retired Magistrate here: Yes it is thanks to the IT individuals from India taking a lot of IT jobs here. My husband got riffed twice because of that and he finally retired and that happened 12 years ago; I am sure it is much worse now.
Prove it.
There is this to worry about…the business games being played…hopefully, this will stop.
https://www.justice.gov/opa/pr/civil-rights-division-sues-cloudera-excluding-us-workers-applying-high-paying-technology
Talk the lad/lass into a 2 year , hands on electrician course and working the whole time. Many many jobs out there for the PEC’s. Plumber Electrician Carpenter’s. Your IT grad has a lot of the electrician training already completed. Running wire for a youngster is easy money these days. Just saying! 🤷🏼♂️
IT without a direct connection to getting your hands dirty is a profession going the way of buggy whips.
Just bought a boat and am amazed at all the fish-finder screens, Bluetooth, networks, and automation in these things. A person needs IT just to set one up. Did any of you know that a modern boat with all the bells and whistles can be launched and remotely controlled to come back to the dock and pick you up?
How about all the networking and systems in modern homes and appliances? IT isn’t about sitting at a workstation anymore, it’s out in the real world where people touch things.
A nice market rally today, all of my stocks are in the green today. Let’s keep it going.
Anyone who went heavy into energy when PDT took office probably isn’t complaining about high energy costs. We made 6 years income in the last 2 months
My requisite, albeit redundant, job-numbers comment… they are a farce. Cannot be trusted.
PS: I remember when 5% unemployment was considered “full employment”.
Yup. When I was laid off in 1981 it was around 11% but if you listen to some they say “boomers had it easy”. The early 80’s was tough.
I was job hunting back then. Every business had signs up, NO HIRING. NO APPLICATIONS.
In my neck of the woods (PNW ) the unemployment rate was closer to 20%.
If you had a job then you were fortunate until you wanted to buy a house. My first mortgage was 14%.
Yep we had it easy. 🤣🤣
Donald Trump and the Path to a New Conservatism
https://theimaginativeconservative.org/2018/10/new-conservatism-donald-trump-fh-buckley.html
These numbers are good. Gas prices since the war started are not. I paid $4.99 a gallon today in Ohio whereas they were on average under $3.00 on Feb. 28. President Trump should have declared victory and left a month ago. Our avowed objectives were met. Now we have mission creep to take all Iran’s enriched uranium and control the Strait. We won. Why get bogged down and hurt a robust economy. Time to get out. Leave the mopping up to Israel if regime change is its ultimate goal.
Drive less!
It is approximately $6.00 a gallon ( U.S. Gal) here in Greater Vancouver B.C.
I would pay $8.00 if it ensured that President Trump was “ left alone to complete his last 2 1/2 years and save your Republic.
From my very small town perspective, a couple of things I’ve noticed. For years people were struggling to find just a low paying job, would apply to everything advertised, and couldn’t get a job. Now, I am seeing a lot of small, medium, and large businesses asking for help and actually hiring. That’s very positive.
On the fuel costs… I have a bet with myself that I won’t have to fill up the car again until gas prices go back down. LOL. I filled the tanks before prices went up and I still have 2 vehicles with half a tank. I consolidate any driving I have to do. That being said, I am not a commuter, but I do remember the Obama prices which were extremely high and that took a bite out of the budget. I have great empathy for the commuting public right now.