US GDP Sees First Decline Since 2022

The United States' gross domestic product (GDP) experienced a 0.3% decline in the first quarter of 2025 compared to the previous year, marking the first negative growth since November 2022, as reported by the Bureau of Economic Analysis.

Key Factors Behind the Downturn

The economic contraction was largely attributed to a significant increase in imports and a reduction in federal government spending, especially in defense. However, these setbacks were somewhat mitigated by positive trends in private investment, exports, and consumer spending.

Consumer Demand Remains Strong

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

Rising Inflation Concerns

Adding to the economic challenges, inflation pressures intensified, with the price index of personal consumption expenditures rising to 3.6%, up from 2.4% in the previous quarter.