US GDP Sees First Decline Since 2022

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

Key Factors Behind the Downturn

The decline 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 movements in private investment, exports, and consumer spending.

Consumer Demand Remains Strong

Despite the overall economic contraction, consumer demand showed resilience. Final sales to private domestic purchasers saw a notable increase of 3.0%, indicating sustained consumer confidence.

Rising Inflation Concerns

Adding to the economic challenges, inflation pressures intensified. The price index of personal consumption expenditures rose to 3.6%, up from 2.4% in the previous quarter, signaling growing inflationary trends.