Us economy contracts in q1 2025 amid tariff concerns

The US economy experienced an unexpected contraction in the first quarter of 2025. Data released on Wednesday revealed a 0.3% decrease in gross domestic product (GDP). This downturn contrasts with economists' expectations of a 0.4% increase. The contraction is attributed to a surge in imports, which jumped by 41.3% as businesses stockpiled inventory ahead of President Trump's tariffs. This increase in imports significantly offset the GDP. Exports only rose by 1.8% during the same period. Decreased government spending also contributed to the GDP decline. The personal consumption expenditures price index rose 1.8%, marking the slowest quarterly gain since early 2023. Futures tied to major stock indexes plummeted following the GDP report's release.