US GDP Contracts for the First Time Since 2022

The United States experienced a 0.3% decrease in its gross domestic product (GDP) during the first quarter of 2025, marking the first decline since November 2022, as reported by the Bureau of Economic Analysis.

Key Factors Behind the Downturn

Surge in imports and a notable drop in federal government spending, especially in defense, were the primary contributors to this downturn. However, this was somewhat mitigated by increases in private investment, exports, and consumer spending.

Consumer Demand Remains Strong

Despite the overall economic contraction, consumer demand showed resilience, with final sales to private domestic purchasers rising by 3.0%.

Rising Inflation Concerns

The period also saw heightened inflation pressures, with the price index of personal consumption expenditures jumping to 3.6%, up from 2.4% in the previous quarter.