U.S. Economy Shrinks 0.3% in First Quarter as Imports Surge and Government Spending Falls
Real gross domestic product (GDP) decreased at an annual rate of 0.3 percent in the first quarter of 2025, according to the advance estimate released by the U.S. Bureau of Economic Analysis in Washington on April 30, 2025. In the fourth quarter of 2024, real GDP had increased 2.4 percent. It was the first quarterly contraction of the U.S. economy since the first quarter of 2022.
The Bureau said the decrease in real GDP primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending, partly offset by increases in investment, consumer spending and exports. The surge in imports was led by consumer goods (mainly medicinal, dental and pharmaceutical preparations) and capital goods (mainly computers and parts), as many businesses brought in goods ahead of tariff increases. The decrease in government spending was led by federal defense consumption expenditures, partly offset by an increase in state and local government spending.
Among other components, private inventory investment, led by wholesale trade inventories of drugs and sundries, was the largest contributor to the increase in investment. Consumer spending rose in both services, led by health care and housing and utilities, and goods, where an increase in nondurable goods was partly offset by a decrease in durable goods. Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 3.0 percent, compared with 2.9 percent in the fourth quarter.
On prices, the price index for gross domestic purchases increased 3.4 percent in the first quarter, compared with 2.2 percent in the fourth quarter. The personal consumption expenditures (PCE) price index increased 3.6 percent, and the PCE price index excluding food and energy increased 3.5 percent, both faster than in the prior quarter. The Bureau also noted that the January 2025 Southern California wildfires caused preliminary estimated losses of $34.0 billion in privately owned fixed assets and $11.0 billion in state and local government-owned assets, although the disaster's overall impact on first-quarter GDP could not be estimated separately. The figures are an advance estimate, subject to revision; the second estimate was scheduled for May 29.
Related: Trump Signs Executive Order 14257 Imposing Reciprocal Tariffs (Source: U.S. Bureau of Economic Analysis)
Source: U.S. Bureau of Economic Analysis
Published by GSM · USA (original Chinese edition)
Photo: 图：位于华盛顿的美国商务部赫伯特·胡佛大楼（经济分析局隶属商务部，资料图）。图：Carol M. Highsmith，公共领域，via Wikimedia Commons / Photo: The Herbert C. Hoover Building of the U.S. Department of Commerce in Washington (file photo); the Bureau of Economic Analysis is part of the Commerce Department. Photo: Carol M. Highsmith, Public domain, via Wikimedia Commons
