Key Takeaways
- The U.S. economy shrank 0.2% in the first quarter, less than the 0.3% initially reported by the Bureau of Economic Analysis.
- The decline in economic growth was mainly due to a surge of imports as people rushed to buy things from abroad before President Donald Trump’s tariffs kicked in. Imports are subtracted from the GDP total.
- Despite the improved total GDP figure, consumer spending, a major pillar of the economy’s health, was revised downward.
The U.S. economy shrank slightly less than previously thought in the first quarter, according to revised data released Thursday.
The gross domestic product (GDP) shrank at a seasonally adjusted annual rate of 0.2% in the first quarter, the Bureau of Economic Analysis said Thursday, after revising advance data with newer information. That was less than the 0.3% decrease the bureau initially reported in April. The GDP data is scheduled to be revised one more time before being finalized.
Despite the improved GDP figures, some details of the reports showed the economy in a slightly worse condition. Consumer spending, the main driver of the economy’s growth, was revised downward, but an increase in business investment more than made up for that slip.
Economists said the decreasing GDP, the first negative growth since 2022, was mainly due to people rushing to buy imported products before President Donald Trump’s tariffs took hold. The value of imports counts against the total GDP.
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