A report from
the Commerce Department revealed on Thursday that the U.S. economy shrank more than previously
estimated in the first quarter of 2025, due primarily to the downward revisions
to consumer spending and exports that were partly offset by a downward revision
to imports.
According to
the third estimate, the U.S. gross domestic product (GDP) decreased at an
annual rate of 0.5 per cent in the first quarter, being worse than the 0.2 per
cent drop reported in the second estimate. Still, this was the
first quarterly contraction since the first quarter of 2022 (-1.0 per cent
q-o-q).
Economists had anticipated
the growth rate to be unrevised at -0.2 per cent q-o-q.
In the previous
quarter, the economy grew by 2.4 per cent q-o-q.
The first-quarter decline in real GDP primarily reflected
an advance in imports, which are a subtraction in the calculation of GDP, and a
fall in government spending, which, however, were partly offset by gains in
investment and consumer spending.