The U.S. economy contracted in the first quarter as President Donald Trump’s economic agenda took effect, according to new data released on Wednesday.
The Commerce Department’s Bureau of Economic Analysis (BEA) released its advance estimate for first quarter gross domestic product (GDP), which found the U.S. economy contracted at an annual rate of 0.3% in the first quarter, which runs from January through March.
Economists surveyed by LSEG had expected the economy to grow at a 0.3% rate in the quarter. The first quarter’s 0.3% contraction was slower than the 2.4% GDP growth recorded in the fourth quarter.
The decline in GDP was attributed primarily to an increase in imports, which count as a subtraction in the calculation of GDP, as well as a decrease in government spending. Those shifts were partially offset by increases in investment, consumer spending and exports.
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The rise in imports was driven by consumer goods, primarily pharmaceutical goods, medicines and vitamins; and by capital goods like computers and parts. The surge of imports was driven in part by importers preordering products in an effort to have the shipments beat the implementation of President Trump’s tariffs.
This is a developing story. Please check back for updates.
