The US economy shrank during the first three months of America’s new “golden age.” And private sector hiring decelerated dramatically this month.

Those were the main takeaways from two of Wednesday’s several high-profile US macro events.

I’m (very) reluctant to traffic in conspiracy theories having seen, first hand, the extensive damage they do when deployed indiscriminately against a body politic. Instead, I’ll simply note that the BEA’s ultimately under the command of Howard Lutnick. Take that as you will.

The first read on US GDP for Q1 showed a 0.3% contraction, attributable mostly to the trade balance. Net exports were an enormous drag. I’ll skip straight to the breakdown, illustrated below.

Net trade was a 4.83ppt albatross, and government spending was a drag for the first time in nearly three years. (Some of that might’ve been down to a pause in funding for Ukraine.)

Imports subtracted more than 5ppt. Needless to say, that was traceable almost entirely to goods, and specifically to consumer goods, as everyone rushed to beat the tariffs. The BEA said it scrubbed a jump in imports of physical silver during Q1.

The figure below gives you some context for the scope of the import effect. Simply put: There’s no precedent outside of Q3 2020, when the data was distorted by the pandemic.

I’ve been waiting all month to make the joke in the chart header. Someone — anyone — better laugh.

Trump tried to blame Joe Biden on Wednesday, and his legions of cheerleaders will probably claim this release was actually decent. That if you strip out distortions, and government spending and just generally anything that wasn’t a fillip, the economy’s in fine fettle.

It also goes without saying that such excuses would be lampooned as wholly farcical if they emanated from anyone but Trump, whose lies are measured not against other people’s falsehoods, but against his own tall tales and perjuries which, by virtue of including any number of appallingly erroneous claims about matters far more consequential than GDP math, make his fibs about the economy seem trivial.

That said, personal consumption growth in the GDP release was a relatively sluggish 1.8%. That’s not “bad,” per se, but does count as the slowest pace of spending since Q2 of 2023, even as it easily exceeded the 1.2% consensus. The key “real final sales to private domestic purchasers” line item showed a 3% advance. That’s solid. No sarcasm.

Unfortunately, the quarterly core PCE readout was 3.5%. That’s pretty quick. Specifically, the briskest in a year.

Consensus expected 3.1%, so the actual print was a meaningful “beat.” And in this case, “beat” isn’t a good thing.

Meanwhile, private sector employers added just 62,000 jobs in April, according to Wednesday’s ADP release. That was the slowest pace since July, and the second-slowest since May of 2023.

Consensus wanted 115,000 from the ADP headline. So, 62,000’s a pretty big undershoot. This comes with the usual caveat: ADP hasn’t been a good predictor of NFP in the post-pandemic era.

The three-month ADP average is now below 100,000 for the first time in a year.

Most industries added jobs, according to the report, but tellingly, health and education services shed 23,000 positions. That’s a sign of the times, I’m afraid.

“Unease is the word of the day,” ADP’s Nela Richardson said. “Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data — it can be difficult to make hiring decisions in such an environment.”

All in all, these releases were as-expected, at least from where I’m sitting. I wasn’t surprised by anything I saw. The US is sliding into what it’s fair to call “stagflation-lite.”

The economy’s probably strong enough to resist the gravitational pull of Trump’s policy black hole for another quarter or two. But I fear we’ve already crossed his event horizon. And not just as it relates to the economy.

Here’s what’s likely to happen: That trade effect (illustrated above) will snap back in Q2, and Trump will declare everything “fixed.” But then in Q3, when the readouts are cleaner, you’ll start to see the drag on consumption and business spending. That’ll be harder to explain away. By Q4, the situation will be a semblance of acute, and that’s when the GOP will start worrying about the mid-terms.

The silver lining (or a possible silver lining, anyway) is that Trump will see that coming — or someone else will, and explain it to him — prompting a series of policy U-turns to stave it off. We’ll see.