U.S. Economy Faces First Decline in Three Years
By PAUL WISEMAN, Associated Press Economics Writer
The U.S. economy contracted at an annual rate of 0.3% from January to March, marking its first decline in three years. The shrinkage was primarily driven by a surge in imports, as companies rushed to bring in foreign goods ahead of anticipated tariffs from President Donald Trump.
This downturn contrasts sharply with the previous quarter’s robust 2.4% growth. Notably, imports alone subtracted 5 percentage points from first-quarter growth, while consumer spending experienced a significant slowdown, and federal government expenditure fell by 5.1%.
However, the investment landscape isn’t entirely bleak; business investment surged by 21.9% as companies increased spending on equipment. Moreover, a key metric reflective of the economy’s core strength rose at a healthy 3% annual rate, improving from 2.9% in the last quarter of 2024. This measure, which excludes volatile elements like exports and inventories, signifies a resilient aspect of the economy.
Despite inheriting a stable economy, Trump’s unpredictable trade policies, including imposing 145% tariffs on China, have created uncertainty for businesses and may pose challenges for consumers in the near future.
Originally Published: April 30, 2025, at 6:02 AM PDT
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