Overview

• The Commerce Department’s third estimate shows a 0.5% annualized decline in Q1 GDP, marking the first contraction since early 2023.
• A 37.9% jump in imports subtracted about 4.61 percentage points from GDP as companies front-loaded shipments ahead of tariff hikes.
• Consumer spending expanded just 0.5%, its slowest pace since 2020, while federal outlays fell 4.6%, the largest drop in decades.
• Inventory accumulation added 2.59 percentage points to GDP, indicating that much of the import wave remained in stockpiles.
• Inflation pressures held firm with the price index for domestic purchases up 3.4% and the core PCE measure revised to a 3.5% annual rate.