FX.co ★ US Economy Shrinks Less Than First Estimated

In the first quarter of 2025, the U.S. economy experienced a contraction at an annualized rate of 0.2%. While this marks an improvement from the initial estimate of a 0.3% decline, it represents the first quarterly GDP decrease in three years. This revised figure is a result of higher-than-anticipated fixed investment, which helped counterbalance weaker consumer spending and a more significant negative impact from trade. Imports of goods and services surged by 42.6%, as both businesses and consumers hastened to stockpile in anticipation of rising prices, following a series of tariff announcements by the Trump administration. Meanwhile, consumer spending growth decelerated to 1.2%, the slowest rate since the second quarter of 2023. Federal government spending decreased by 4.6%, marking the steepest decline since the first quarter of 2022. Conversely, fixed investment rose by 7.8%, marking the strongest increase since mid-2023, and exports grew by 2.4%.