US first-quarter GDP: Economy contracted at a 0.3% rate

The American economy has contracted in the first quarter with president Donald Trump’s economic agenda, according to new data issued on Wednesday.

The Economic Analysis Office of the Ministry of Trade (Bea) issued its pre -appreciation of the GDP in the first quarter (GDP), which found that the American economy had contracted at an annual rate of 0.3 % in the first quarter, which lasts from January to March.

Economists signed by the survey by LSEG that the economy would grow at a rate of 0.3 % in a quarter. The first -quarter shrinking by 0.3 % was slower than GDP growth by 2.4 % registered in the fourth quarter. It was the first separate shrinkage since the first quarter of 2022.

The decrease in gross domestic product is due primarily to an increase in imports, which is a proposal in the gross domestic product account, as well as a decrease in government spending. These transformations were partially compensated by increases in investment, consumer spending and exports.

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The increase was 41 % in imports driven by consumer goods, especially pharmaceutical commodities, medicines and vitamins; Capital commodities such as computers and parts.

The level of height in imports has been partially raised by importers who arrange products in an attempt to overcome shipments to implement the Trump tariff.

Consumer spending increased by 1.8 % with gains for both service (+2.4 %) and commodities (+0.5 %), as the increases in spending on services were widespread and driven by health care, housing and facilities. Under the spending on goods, an increase of 2.7 % in non -applicable goods was compensated in part by a decrease of 3.4 % in durable goods.

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Business investment increased by 21.9 % in the first quarter after it recorded a 5.6 % decrease in the fourth quarter. The non -residential investment increased by 9.8 % in the quarter, led by a 22.5 % increase in equipment spending.

The available personal income was 2.7 % in the first quarter, an increase of 1.9 % in the fourth quarter.

Personal savings as a percentage of personal income was 4 % in the first quarter, an increase of 3.7 % in the fourth quarter – despite its decrease from 5.4 % in the first quarter of 2024.

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Government spending decreased by 1.4 % in the first quarter, led by a 5.1 % decrease in federal government expenditures. Federal spending on national defense activities decreased by 8 %, while delicate spending decreased by only 1 %. Government spending and local government increased by 0.8 %, which is the slower growth since the second quarter of 2022.

“The gross domestic product goes beyond the appearance, but there was some good news as real final sales for local buyers, the economy engine, has achieved a decent gain,” wrote Ryan Sowet, the chief American economist in Oxford Economy.

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He said: “This matter will be tested as the economy is now exposed to many shocks, including customs tariffs, stress in the supply chain, and the most hard -line financial market conditions, but daily data indicates that the economy engine has not stopped early in this quarter.”

Sweet added: “The Q1 data on GDP highlights the link in which the Federal Reserve is found. The economy was mainly stagnant in the first three months of the year while growth in the main headlines and basic inflation accelerated, and fears of stagnation declined.”