US economy shrank 0.5% in the first quarter of 2025 amid tariff uncertainty

The U.S. economy contracted in the first quarter as tariffs caused importers to surge shipments before higher levies took effect.

The Commerce Department's Bureau of Economic Analysis (BEA) released its third estimate for first quarter gross domestic product (GDP), which found the U.S. economy contracted at an annual rate of 0.5% in the first quarter, which runs from January through March.

Economists surveyed by LSEG had expected the economy to contract at a 0.2% rate in the quarter, in line with the second preliminary reading. The contraction comes after 2.4% GDP growth was recorded in the fourth quarter.

The 0.5% GDP contraction shown in the final first-quarter GDP figures is the first quarterly contraction since the first quarter of 2022.

The decline in GDP was attributed primarily to an increase in imports along with a decrease in government spending. Those shifts were partly offset by increases in investment and consumer spending.

Imports surged 37.9% in the first quarter and accounted for a contraction of 4.66% in GDP, as firms ramped up imports in an effort to minimize the impact of President Donald Trump's tariffs, which are taxes on imported goods. In the GDP calculation, imports are subtracted because the metric is meant to measure domestic production.

0.5shrank by AI is licensed under

Help FAIRtax Become The Number One Issue in 2025

Enacting the FAIRtax must be a prominent topic in these times. We did it before, we can do it again, but we need your help!

Help out with a One-Time Contribution

Your gift of $25, $50, $100 – even $1,000 or more if you can possibly spare it – will help FAIRtax.org bring an end to the IRS and promote a FAIRtax. So, I urge you, please give as generously as you can.

Billing information (REQUIRED)

Payment information (REQUIRED)

To donate by check:
Americans for Fair Taxation
PO Box 4929
Clearwater, FL 33758

If you need to make changes for any reason to your existing Monthly Donation or if you have a question about any charge, Please email info@FAIRtax.org or call ‭(800) 324-7829‬
Provide ONLY your name and phone number, do not provide any card info.

Please Note that inputting your new information at our website won't update your account.

Thank you for your support!


Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!

Connect

Share