WASHINGTON—The U.S. economy shrank in the first quarter more than initially estimated, as consumer spending weakened and businesses scrambled to import goods ahead of the Trump Administration’s sweeping tariffs, the Bureau of Economic Analysis reported.
The BEA revised gross domestic product downward to a 0.5% annualized decline, compared with the previously reported 0.2% drop. The adjustment was largely due to a sharp cut in consumer spending, which was revised to a modest 0.5% gain from the earlier estimate of 1.2%.
“Compared to the fourth quarter, the downturn in real GDP in the first quarter primarily reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending that were partly offset by an upturn in investment,” the BEA stated.
Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 1.9% in the first quarter, revised down 0.6 percentage point from the previous estimate, the BEA noted.
“From an industry perspective, the decrease in real GDP reflected decreases of 2.8% in real value added for private goods-producing industries and 0.3% for private services-producing industries that were partly offset by an increase of 2.0 percent in real value added for government,” the BEA said.