Source: Sharecast
The Q1 contraction, which puts the US on the brink of a technical recession, was principally driven by a 41.3% surge in imports as both businesses and consumers looked to stockpile goods in order to get ahead of 2 April's "Liberation Day" tariff announcements by Donald Trump, who was wrapping up his first 100 days in office on Wednesday . Economists had been expecting to see a 0.3% increase in GDP during Q1.
"The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment, consumer spending, and exports," said the BEA.
Elsewhere, consumer spending rose 1.8% and federal government spending declined 5.1%, which was the biggest decrease since Q122.
Reporting by Iain Gilbert at Sharecast.com