CNBC editor Rick Santelli noted that gross domestic product (GDP) numbers were “better than expected” Wednesday, despite concerns about “Liberation Day” tariffs announced April 2 by President Donald Trump.
GDP rose by an estimated 3%, the Bureau of Economic Analysis noted in a Wednesday release, fueled by a decline in imports. Santelli noted that the figure came in above expectations.
“These are the advance, of course, so they will be modified. But we are expecting a number around 2.5%. Last quarter, do you realize was down half a percent? That was the weakest quarter since the first quarter of 22. And they’re out, up 3% up 3%, better than expected,” Santelli said on “Squawk Box. “That would be the highest level since the third quarter of 24, when it was up 3.1%. On the consumption side, up 1.4, very close to estimates, up 1.4 would be the best since the last quarter of 24. And I do want to point out, if you look at the consumption numbers for last quarter, up half a 1%, that is really weak. As a matter of fact, that goes in comps to the worst, darkest days of Covid when it was down 30%.”
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“However, I wanted to know outside of Covid, when was the last time we saw consumption that low? You’re going back to June of 2011. Just as a footnote on the pricing index side, less than expected. We’re looking for a number over 2%, this number is at 2%,” Santelli continued. “2% would be the lowest pricing index number read going back to the third quarter of 24 when it was 1.9%. And finally, the core personal consumption expenditures price index. That’s a quarter over quarter number expected to be around 2.3, comes in a little heavy, this one’s a little heavy at 2.5. 2.5 would be the highest since last quarter of 24 when it was 2.6. So very good news. All in all, especially considering that liberation, April 2nd falls in this quarter, and it was definitely better than expected.”
Trump announced reciprocal tariffs to address import duties and “horrendous imbalances” in trade with other countries during an April 2 Rose Garden event, before announcing the pause via an April 9 post on Truth Social that also announced substantial increases on tariffs on Chinese exports to the United States. “Squawk Box” host Joe Kernen observed that some of Trump’s critics might try to seize on an “outlier” to paint a picture of the economy struggling.
“[Democratic] Senator Elizabeth Warren [of Massachusetts] will come on and say inflation is out of control and the economy is getting killed by what’s happening by these tariffs, this 3% with the market at new highs. And really we haven’t seen inflation, you know, go up back to three,” Kernan observed after Santelli broke down the economic numbers. “Maybe it will this week. Maybe we’ll see it. But none of these things, none of these horrible things have happened. But they still talk like it’s happening. It’s amazing.”
“Well… there’s an important lesson there: Don’t pick a congressman to be your money manager. That’s what I would say,” Santelli responded.
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