GDP falls in the US for the first time in three years: economy shrank by 0.3% in the first quarter
US real GDP for the first quarter of 2025 decreased by 0.3% year-on-year, according to preliminary data from the US Bureau of Economic Analysis.
For comparison, in the fourth quarter of 2024, real GDP grew by 2.4%.
Annualizing the quarterly GDP figure means that the current rate of change is recalculated as if the economy would continue to change at the same rate for the entire year. That is, the actual decline for the quarter was smaller, but the US traditionally uses the annualized figure.
The decline in GDP was mainly due to higher imports before the introduction of the duties and lower public spending. These negative factors were partially offset by increased investment, consumer spending, and exports.
At the same time, consumer spending, which accounts for two-thirds of GDP, grew by only 1.8%, the worst since mid-2023, according to Bloomberg .
Business spending on equipment, the only positive in the report, grew at the fastest pace since 2020, driven by aircraft and computers.
The last quarterly decline in US GDP was in 2022.
- Since the end of February 2025, GDPNow, a reputable economic tracker created by the Federal Reserve Bank of Atlanta for operational forecasting of GDP, , has begun to predict a deep recession in the United States .
- On March 10, US President Donald Trump refused to rule out the possibility that his economic policy of aggressive tariffs against major trading partners could lead to a recession.
- Trump's trade policy is likely to also threaten the Federal Reserve's goals of curbing inflation and unemployment
