Overview

• The U.S. economy shrank 0.3% annualized in Q1 2025, marking the first contraction since early 2022, according to the Bureau of Economic Analysis.
• The decline follows 2.4% GDP growth in Q4 2024 under President Biden, highlighting a sharp economic reversal in the first months of Trump's presidency.
• Businesses stockpiled imports to avoid tariff costs, leading to a record trade deficit in goods in March and contributing significantly to the contraction.
• Consumer spending and business investment slowed as uncertainty over the new tariffs and rising costs weighed on confidence.
• Economic analysts warn of mounting recession fears, with market stress, low consumer confidence, and inflationary pressures creating further challenges.