Archive · 26 Jun 2025
US Economy Contracts 0.5% in Q1 Amid Trade, Spending Concerns
The US economy shrank a bit at the start of the year.
This means the country produced fewer goods and services than before.
People didn't spend as much money, and more goods were brought into the country than were sold to other countries.
This slowdown was partly due to uncertainty about tariffs, or taxes on imported goods.
Experts predict things will get better in the next few months.
US economy contracted at an annualized rate of -0.5% in Q1.
Consumer spending rose by only 0.5%, the slowest pace since 2020.
Imports surged due to anticipation of tariffs, widening the trade deficit.
Federal government spending fell at a 4.6% annual pace.
Economists expect Q2 growth to rebound to 3%.
- Who
- The Commerce Department.
- What
- The US economy contracted in the first quarter of 2025.
- When
- January-March 2025.
- Where
- United States
- Why
- Weaker consumer spending and a widening trade deficit.
- Q1 GDP Growth Rate
- -0.5%
- Previous Quarter Growth (2024 Q4)
- 2.4%
- Consumer Spending Growth (Q1)
- 0.5%
- Imports Growth (Q1)
- 37.9%
- Government Spending Drop
- 4.6%
- Economists' Q2 Growth Projection
- 3%
