The U.S. Department of Commerce announced a contraction of the economy by 0.5% annually during the first quarter of 2025, attributing the reason to trade war disruptions led by President Trump and a 37.9% increase in imports (the fastest since 2020), which lowered GDP by 4.7 percentage points. Consumer and federal government spending also declined (4.6%, the largest since 1986). It is worth noting that this is the first economic contraction in 3 years, compared to a growth of 2.4% in the last quarter of 2024.
Growth is expected to recover to 3% in the second quarter as the flow of imports declines, according to analysts' forecasts. It is noted that the trade deficit mathematically affects GDP because it excludes imports from local production. The department will issue the growth report for the second quarter on July 30.