In response to the first Q2 GDP estimate released today, DNC Rapid Response Director Kendall Witmer released the following statement: 

“Donald Trump has driven up inflation and slowed growth. Trump’s erratic trade war forced working families and small businesses to stockpile necessities, and now, consumers are cutting back, job opportunities are falling, and business investment is plummeting. The bottom line: When economists peek under the hood, Trump’s economy is in tatters and the American people are getting hit the hardest.”

“GROWTH MIRAGE”: After Americans stockpiled on necessities to brace for Trump’s erratic trade war, the economy is already breaking down — real sales sank to the lowest reading since 2022. 

Nick Timiraos: “Real final sales to private domestic purchasers, a gauge of underlying demand, advanced 1.2%, a not-so-hot (but not terrible) figure.

“It is the lowest quarterly reading since 2022.”

Heather Long: “The key drivers were:

1) A massive decline in imports after the April “Liberation Day” tariffs. -35.3% (!) for goods in Q2

2) Consumption up 1.4% (vs. just 0.5% in Q1)

“Notable: Business investment declined in Q2, underscoring how nervous firms are to do much hiring or spending in uncertain times.”

Jason Furman: “In sum, in the first half of this year GDP was relatively weak (1.2%) and core inflation was relatively high (3.0%). This is not a catastrophic recession or inflation but it is a cause for serious concern–and a real quandary for the Fed.”

NEW POLLING: Americans are feeling uneasy about their personal finances, with half of Americans stating they haven’t been able to save as much as they’d like.

Navigator Research: “Americans remain sour on the economy with 63 percent rating the U.S. economy negatively …

“A 53 percent majority feel behind where they thought they would be financially, with over a quarter saying they feel ‘far’ behind (28 percent).

“An identical majority (53 percent) express uneasiness with their personal financial situation over the next few months, with a quarter also saying they are ‘very’ uneasy (26 percent). Half of Americans say that in the last month they have been unable to save as much as they’d like (50 percent) or that they have had to cut back on recreational activities (48 percent).

“Americans are feeling this pain most in the cost of groceries, with 79 percent saying costs are going up and 42 percent saying costs are going up ‘a lot.’ …

“As a result, 42 percent of Americans say that they have had to cut back on purchasing daily goods, such as groceries, in the last month.”

U.S. companies are already raising prices for consumers — Procter & Gamble is raising prices on 25% of its products.

Associated Press: “Consumer products giant Procter & Gamble offered an annual earnings outlook that was below analysts’ projections and said it would raise prices on about a quarter of its products in the U.S. in part due to higher costs from President Donald Trump’s tariffs.

“The price increases, which will be implemented starting next month, will be in the mid-single digit percentages…

“P&G on Tuesday estimated that tariffs will increase its costs by about $1 billion before tax for fiscal 2026.”

The Conference Board: Consumers’ views on job opportunities reached their gloomiest level since March 2021, as Americans brace for continued trade chaos and high inflation.

The Conference Board: “[Consumers’] appraisal of current job availability weakened for the seventh consecutive month, reaching its lowest level since March 2021. Notably, 18.9% of consumers indicated that jobs were hard to get in July, up from 14.5% in January. …

“Consumers’ write-in responses showed that tariffs remained top of mind and were mostly associated with concerns that they would lead to higher prices. In addition, references to high prices and inflation rose in July…”

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