Summary
The U.S. economy shrank by 0.5% from January to March 2025, mainly because of increased imports related to trade tensions. This was more than earlier estimated and marked the first contraction in three years.
Key Facts
- The U.S. economy's GDP decreased by 0.5% in the first quarter of 2025.
- Trade tensions and the rush to buy imports before tariffs worsened the economic outlook.
- Earlier, it was estimated the economy shrank by 0.2%.
- Imports rose by 37.9%, reducing GDP by nearly 4.7 percentage points.
- Consumer spending grew only 0.5%, down from 4% in the previous quarter.
- The consumer confidence index fell to 93 in June, a decline from 98.4 in May.
- A measure of the economy's core strength grew at 1.9%, down from 2.9% in the previous quarter.
- Federal government spending dropped by 4.6%, the largest decrease since 2022.
