Washington D.C. - The Bureau of Economic Analysis reported Wednesday that the U.S. Gross Domestic Product (GDP) decreased at an annual rate of 0.3% in the first quarter of 2025. This marks the first negative GDP reading since the economic downturn caused by the Covid-19 pandemic. The decline is attributed, in part, to a significant rise in imports during the quarter.
Economists suggest that businesses may have increased their imports in anticipation of tariffs proposed earlier in the year. Tariffs are taxes imposed on goods brought into the country, and companies often try to stock up before these taxes take effect to avoid higher costs. The increase in imports, while potentially beneficial for businesses in the short term, can negatively impact the GDP calculation.
While the 0.3% decline is relatively small, it raises concerns about the overall health of the U.S. economy. Further analysis and revisions to the GDP figures are expected in the coming months, which may provide a clearer picture of the economic situation. The White House has yet to release an official statement, but economic advisors are expected to address the issue later this week.
US Economy Shrinks Slightly Amid Import Surge
The U.S. economy experienced a slight downturn in the first three months of 2025, shrinking by 0.3%. This is the first time the economy has contracted since the Covid-19 pandemic. Experts point to a large increase in imports as a contributing factor. This surge occurred before new tariffs, or taxes on imported goods, were put in place.
Source: Read the original article at NBC