P Chart 5. Source: U,S, Bureau of Economic Analysis.
FOREWARNED IS FOREARMED…
…but…The Point…
PERSONAL CONSUMPTION ACCOUNTS FOR ABOUT SEVENTY PERCENT OF THE GDP. In the first quarter this key component was +0.5%. Not including negative results during, or just after, the Pandemic and Great recessions, this is the second lowest result in more than thirty years; Q2 2011 was +0.4%. Furthermore, no Personal Consumption result in the recession of 2001 was as low as Q1 2025. Personal Consumption added just 0.31% to the GDP calculation. Using the same caveats as above, there is only one quarter, Q1 2011, which added 0.30%, that had a lower contribution, all the way back to 1991. I’m a little surprised that there was not a pre-tariff surge in consumption. But in any case, there is not much a lift so far in Q2. It is worth noting that Retail Sales is negative on a month-on-month basis in April and May, -0.1% and -0.9%, respectively. Personal Spending rose two tenths from the month before in April, but was a tenth lower on the month in May. Chart 6.
Personal Consumption is the most important component of the GDP. Just because other components made most of the noise in the first quarter, the hush coming from Personal Consumption is probably the thing we should notice most closely.
Lou Brien E:
lbrien@drwholdings.com T:+44(0) 312-542-1136
35 | ADMISI - The Ghost In The Machine | Q3 Edition 2025
Chart 6. Source: Bloomberg Finance L.P.
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