MAY 2, 2025 – It is really difficult to write anything about the economy after the passing of KC Conway, CRE, MAI this week. KC was a great guy. Brilliant mind. The last 20+ years of his career he turned his focus to being an economist. Everyone liked KC. A rare individual. He will be missed by our industry and obviously his family and friends. RIP my friend.
Very briefly, 1st Quarter GDP came in at a -0.3%. As I mentioned in my April 5th post, and last August, the stock market was forecasting a huge negative surprise for this quarter. 99%+ of us had no clue what would cause it. That doesn’t matter. The stock market just says it will happen.
My last email to KC went unanswered. I now know why. I was wondering how much of the GDP reading was attributed to the extreme import trade as companies rushed to beat the tariffs. KC never replied. I have since heard it was probably around 2.0%. So, the actual GDP would have been around +1.7%.
As the import trade will be the reverse in the 2nd Quarter and companies will have stopped ordering from overseas, this will ‘falsely’ inflate the GDP by a similar amount. Early indications are around +2%. This might fall as the economy will definitely be weakening into the Summer. But, the odds of two consecutive negative GDP quarterly readings is very low. Thus, an ‘official’ recession is unlikely at this point.
That said, the market has forecast significant weakness at the beginning of the Fall. Things should be much clearer by then.
As an aside, the DOW Industrials never did trigger a Bear Market. They came close like last August.
That’s enough. Remember, to enjoy EVERY day of your life. We do not know when it will be our last.
Shalom,
The Mann