https://www.ft.com/content/6624600c-0fe0-4e03-b728-b341a23ef797
https://archive.md/5iKQY
US GDP shrank by an annualised 0.2 per cent in the first quarter, according to revised data that confirmed the first contraction since 2022, as Donald Trump’s trade war ripples across the world’s biggest economy.

The fall in GDP compared with a 2.4 per cent expansion in the final quarter of 2024, and was largely caused by a surge in imports as companies rushed to buy foreign-made goods before the US president’s “liberation day” tariff announcement in early April.

Thursday’s reading from the Bureau of Economic Analysis was revised slightly higher from the 0.3 per cent contraction reflected in initial data released last month. But the change was not enough to put the economy in positive territory for the period as consumer spending cooled.

The statistics for the first quarter were distorted by a surge in imports — driven by companies’ tariff fears — that were not offset by a corresponding rise in inventory investment or purchases by consumers.

While investment rose in the revised statistics, that was largely counteracted by a fall in the rate of growth in consumer spending — especially in services and housing — as Americans contend with higher prices and uncertainty stemming from the trade war.

“You are seeing consumers that have slowed consumption,” said Andrew Hollenhorst at Citi. “That kind of aligns with what we’ve been hearing, especially from hotels and airlines, that services spending has been slowing.”

US consumer prices have risen more than 25 per cent since 2019, before the Covid-19 pandemic, which has weighed on consumer sentiment reports and prompted anxious shoppers to cut back.

The balance between imports and exports is an important factor in calculating GDP, which also measures domestic consumption, investment and government spending. The BEA calculates GDP based on numerous reports, so the figures do not always align precisely.

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Retard Trump shrank the US economy in 1st quarter of 2025