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.