April 30 (UPI) — U.S. economic gross domestic product declined for the first three months of 2025 as imports surged amid Trump administration tariffs.
The Bureau of Economic Analysis said in a statement that real GDP fell at an annual rate of 0.3% in the first quarter.
The BEA said the GDP drop “primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending.”
Dow Jones surveyed economists had expected GDP growth of 0.4%.
Real GDP increased 2.4% in the fourth quarter of 2024.
The BEA said imports were up 41.3% in the first quarter driven by a goods increase of 50.9%.
Increases in investment, consumer spending and exports partially offset the higher imports, according to the BEA.
“Maybe some of this negativity is due to a rush to bring in imports before the tariffs go up, but there is simply no way for policy advisors to sugar-coat this. Growth has simply vanished,” FWDbonds chief economist Chris Rupkey said.
Consumer spending measured by the personal consumption expenditures index, was up 1.8% compared with a 4% increase in the fourth quarter of 2024.
The drop in GDP fed more recession fears, even as both the jobs market and consumer spending remain resilient for now.
President Donald Trump blamed his predecessor, former President Joe Biden, for the poor GDP showing in a post on his social media platform Truth Social.
“This is Biden’s stock market, not Trump’s. I didn’t take over until Jan. 20. Tariffs will start kicking in and companies are starting to move into the USA in record numbers,” Trump said. “Our country will boom, but we have to get rid of the Biden “overhang.” This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”
The Dow dropped 400 points Wednesday morning on the shrinking economy news.
