US GDP Experiences First Decline Since 2022

The United States' gross domestic product (GDP) witnessed a 0.3% decrease 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 primarily fueled by a significant rise 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 increasing by 3.0%.

Inflation on the Rise

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