The U.S. economy contracted in the first quarter as tariffs caused importers to surge shipments before higher levies took effect.
The Commerce Department’s Bureau of Economic Analysis (BEA) released its third estimate for first quarter gross domestic product (GDP), which found the U.S. economy contracted at an annual rate of 0.5% in the first quarter, which runs from January through March.
Economists surveyed by LSEG had expected the economy to contract at a 0.2% rate in the quarter, in line with the second preliminary reading. The contraction comes after 2.4% GDP growth was recorded in the fourth quarter.
The 0.5% contraction shown in the final first quarter GDP figures is the first quarterly contraction since the first quarter of 2022.
The decline in GDP was attributed primarily to an increase in imports along with a decrease in government spending. Those shifts were partly offset by increases in investment and consumer spending.
This is a developing story. Please check back for updates.
