US Real GDP came in at a -0.3% annualized growth rate in Q1 2025. Consumption increased, the trade deficit exploded, investment jumped (primarily due to inventory buildups), & public-sector output shrank

Nominal GDP growth (unadjusted for inflation) came in at 3.5% annualized🧵 The big story of Q1 was trade—and even though few of Trump's tariffs were in place by end-of-March, there was still a historic increase in the trade deficit.

This is the largest negative contribution from net exports on record, going back to 1947.

Trying to think about the state of the Effective Altruist movement and realizing Elon killing USAID probably overwhelms the total amount of good ever achieved by all EA global health donations. PEPFAR alone is $7B/yr, 10x total EA spending, & all USAID spending is only ~$30B/yr the average USAID project is less effective than the average EA donation (because EAs are hard-filtering for the most effective known interventions) but even still USAID spends hundreds of millions on like effective anti-malaria programs, it's total impact is massive and now gone

Today we got new GDP by Metro area data, so here's a thread breaking down the numbers by state/region!

Starting with California, where there's been a partial rebound in the Bay Area tech hubs while SoCal growth heavily trails the national & state average.🧵 In Texas, Houston was able to claim the crown for the triangle's fastest-growth amidst a regional oil boom.

Growth in Austin & Dallas slowed to the more "normal" pace they tended to see pre-COVID, but remain well above the national average.

NEW from Me:

The post-COVID economic recovery is leaving low-income countries behind. Extreme poverty has risen since 2019, and low-income countries are no longer catching up to high-income countries.

It could mean a lost decade for poverty reduction🧵
apricitas.io/p/low-income-c… Over the last 40 years, the world has made historic progress in reducing the scourge of global poverty. The share of the human population living on less than $2.15/day has fallen from >40% to <10%. Yet progress has been too slow—and even worse, it has now stalled.

NEW from me:

US productivity growth, the bedrock of long-run prosperity, is booming—and massively outshining peer nations. It's the fruit of running the labor market hot post-COVID, and now it's delivering higher wages, consumption, & welfare🧵
apricitas.io/p/americas-pro… US productivity growth was stagnant in the immediate wake of the 2008 recession—but the aggressive fiscal & monetary response to the COVID recession has meant that productivity growth not only remained strong but actually accelerated from the pre-COVID pace.

America's industrial policy push has caused an unprecedented boom of investments in chip manufacturing, clean energy, & infrastructure

But those investments aren't spread evenly, instead having regional dynamics that are reshaping US economic geography🧵 America's investment boom has affected every part of the country, but intentionally wasn't spread evenly across the US

In particular, states building major chip fabs have had unprecedented construction growth—that's Arizona (+$36B,+430%), Texas (+$41B,+84%), & Ohio (+$20B,+200%)

Last week, the Biden administration raised tariffs on a wide variety of Chinese goods—including EVs, batteries, & solar panels—in another round of the continually escalating trade war

Let's break down what those tariffs mean and their potential impacts:🧵
apricitas.io/p/a-detailed-l… Many of the China tariffs announced last week are preventative measures to reinforce the trade status quo

Take the new 100% tariffs on EVs—Chinese EVs were already functionally excluded by prior trade restrictions, the new tariffs just ensure they don't break through old tariffs

US manufacturing has a massive fundamental problem—it hasn't seen productivity growth in 17 years

That makes it increasingly impossible for the US to compete in key areas, and the recent industrial policy push will fail unless it can end that stagnation🧵
apricitas.io/p/americas-man… Today, US factories produce just as much per hour worked as they did in 2007, despite the tectonic technological shifts since then

That's an acute problem for the US since the high wages in other sectors necessitate high manufacturing productivity for it to stay competitive

NEW from me🧵

California used to dominate US tech industry employment, but began falling behind at the start of the pandemic

Now, the Golden State is losing tech workers outright—and its share of total US tech jobs has hit the lowest level in a decade
apricitas.io/p/california-i… The share of total US tech jobs located in California rose steadily throughout the 2010s, but has fallen significantly since the start of the pandemic

That drop accelerated over the last year, falling nearly a full percentage point as California begins to lose tech jobs outright

NEW🧵

Investment is booming in Mexico—nonresidential construction is up 50% due to major public works projects and manufacturing nearshoring

Simultaneously, US-bound exports are at record highs as Mexico benefits from more aggressive US industrial policy
apricitas.io/p/mexicos-inve… Mexico, like the US, has taken a much more active approach to managing its economy over the last several years. That includes heavy subsidies for domestic investment that have driven real nonresidential construction to record highs over the last year.

The US and China are in the midst of a massive, escalating trade war over semiconductors

China is currently importing record amounts of chip manufacturing equipment in an attempt to build out domestic semiconductor capacity—while DC tries to clamp down with further sanctions🧵 In October 2022, America imposed comprehensive sanctions on China designed to hamstring their domestic semiconductor industry

That reduced the amount of US-made chip and chipmaking equipment exports to China—however, exports (especially of equipment) have since rebounded

Ozempic and Wegovy continue to power the Danish economy

In 2023, Danish GDP grew 1.8% (blue). Were it not for the pharmaceutical industry (orange), GDP would have shrunk 0.1% (green)

Since Q4 2022, Pharmaceuticals contributed 1.8% to growth versus 1.4% from all other industries Danish industrial production is also at record highs thanks to a more-than-tripling of pharmaceutical manufacturing since 2018 amidst the weight-loss drug boom

In the 1950s there were 3 cars for every 10 Americans (compared to 9 cars for every 10 today), the homeownership rate was 55% (66% today), and 6% of Americans had a college degree (38% today)

https://twitter.com/creation247/status/1759367190644469922

Hey if they get to repost so do I

Maybe one day people won't take 1950s advertising as the gospel truth, but that day is not today.

What's behind today's 3.3% Real GDP print?

Consumption growth contributed 1.91%, principally from a rise in services (1.06%) led by food services/accommodation (.37%) & healthcare (.36%)

Goods consumption contributed 0.85% due to nondurables (.49%) & nondurables (.36%)

🧵1/4

https://twitter.com/JosephPolitano/status/1750512068711584128

Meanwhile, rising government output contributed 0.56% annualized to real GDP growth in the fourth quarter.

High growth at state & local governments was the main driver, contributing 0.4% to GDP growth split relatively evenly between consumption (.22%) and investment (.18%).

Since COVID, America has seen a historic surge in inflation—yet a strong labor market means wages have increased faster than prices, especially for lower-paid workers

Real wages are rising—but understanding how requires a detailed look at imperfect data🧵
apricitas.io/p/are-real-wag… Measuring real wages requires aggregating data on both wages and prices in ways that can cause significant short-term problems

For example, rises and falls in low-wage employment move average real wages in a way that can be divorced from most worker's welfare, as seen in 2020/21

3 key clean energy technologies have recently hit exponential adoption curves: EVs, batteries, and solar panels.

All 3 are dominated by China—but the US and EU are trying to change that via green industrial policies & trade wars.

Is it working?🧵
apricitas.io/p/the-green-tr… Today, there are 3 stories of exponential growth in decarbonization technology:

1) EV sales have increased 6x since 2019
2) Solar power generation has nearly doubled since 2019
3) Utility-scale batteries are being deployed en masse for the first time

US job and wage growth have slowed down considerably—likely signaling an end to the exceptionally strong labor markets of the last two years.

Perhaps most worrying, firms' hiring expectations for the next year remain weak🧵
apricitas.io/p/americas-wea… The pace of net job growth has declined significantly over the last two years, and has recently fallen into the range where it's mostly just keeping up with population growth (h/t @EconBerger)

The supply and demand drivers of inflation have all cooled considerably—while employment makes new highs and real GDP accelerates

A procession of positive economic data has boosted the odds of a soft landing, which the Fed now sees as its base case🧵
apricitas.io/p/sticking-the… Nominal GDP, the dollar size of the US economy, has grown by only 6.3% over the last year, the lowest annual rate since Q1 2021, while Real GDP has grown by 2.6%, the highest rate since Q1 22.

Combined, it's been exceptional news for inflation, which has fallen to 3%.

6 months ago I called the New Tenant Repeat Rent Index "the most important new inflation indicator"—a title I don't bestow lightly

It's the most robust leading indicator for housing inflation—and it's now telling us to expect a significant slowdown 🧵
apricitas.io/p/the-most-imp… Official rent data from the Consumer Price Index does a great job measuring average rents—but those lag market dynamics significantly

The New Tenant Repeat Rent Index (NTRR), by only looking at newly signed leases in the CPI sample, provides a snapshot of the current market

The US is engaged in a rapidly-escalating semiconductor trade war with China—sanctions have caused US-manufactured chip exports to China to fall by 60% and exports of chipmaking equipment to fall by 40%

Yet the US needs cooperation and industrial policy success to win it's war🧵 The US represents only a small part of China's semiconductor imports, the vast majority of which come from Taiwan and South Korea. The US will need high levels of cooperation from Asian manufacturers to win the chip war, which it is only partially achieving now.

America is engaged in a rapidly-escalating chip trade war with China—hoping to prevent the CCP from gaining an edge in critical tech that underpins the global economy

It needs major international cooperation and industrial policy success to win that war🧵
apricitas.io/p/the-semicond… Last October, the US instituted a comprehensive package of chip sanctions and export controls against China—which caused US-manufactured chip exports to China to fall by nearly 60% and exports of US-manufactured chipmaking equipment to fall by nearly 40%.