Overview
- The U.S. GDP shrank by 0.3% annualized in Q1 2025, the first quarterly decline in three years, according to the Bureau of Economic Analysis.
- A 41.3% spike in imports, as businesses stockpiled ahead of new tariffs, was a major factor in the contraction, subtracting over five percentage points from GDP.
- Federal government spending fell by 5.1%, further contributing to the economic slowdown, while consumer spending grew modestly by 1.8%.
- Wall Street indices dropped nearly 2% following the GDP report, reflecting investor concerns over trade policies and recession risks.
- Uncertainty surrounding Trump’s aggressive tariff measures has dampened business and consumer confidence, with analysts warning of potential further economic strain.