First-quarter growth was weighed down by a surge of imports as US companies and households rushed to buy foreign goods before Trump could impose tariffs on them.
The Commerce Department previously estimated that the economy fell 0.2 percent in the first quarter. Economists had forecast no change in the department’s third and final estimate.
The January to March drop in gross domestic product (GDP) – the nation’s output of goods and services – reversed a 2.4 percent increase in the last three months of 2024 and marked the first time in three years that the economy contracted. Imports expanded 37.9 percent, the fastest since 2020, and pushed GDP down by nearly 4.7 percentage points.
Consumer spending also slowed sharply, expanding just 0.5 percent, down from a robust 4 percent in the fourth quarter of last year. It is a significant downgrade from the Commerce Department’s previous estimate.
Consumers have turned jittery since Trump started plastering big taxes on imports, anticipating that the tariffs will impact their finances directly.
And the Conference Board reported this week that Americans’ view of the US economy worsened in June, resuming a downward slide that had dragged consumer confidence in April to its lowest level since the Covid-19 pandemic five years ago.
The Conference Board said on Tuesday that their consumer confidence index slid to 93 in June, down 5.4 points from 98.4 last month. A measure of Americans’ short-term expectations for their income, business conditions and the job market fell 4.6 points to 69. That is well below 80, the marker that can signal a recession ahead.
Former Federal Reserve economist Claudia Sahm said the “downward revision to consumer spending today is a potential red flag”.
An interesting fact. As of May 2025, nearly 60% of China's total installed power capacity comes from clean sources – a stunning one-third increase from just four years ago.
#GreenChina
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