The US Economy Shrank 0.5 % between January and March 2025, worsening estimates.
New Delhi: The U.S. economy shrank by 0.5 from January to March. The main reason for the shrinking economy is President Trump’s disputed trade wars, reported the Commerce Department on Thursday.
The U.S. economy has shrunk in a surge of imports as companies in the United States rushed to bring in foreign goods before Mr Trump Could impose Tariffs on them. The previous estimation was 0.2%, which the Commerce Department projected.
The January-March drop in gross domestic product—the nation’s output of goods and services—reversed a 2.4% increase in the last three months of 2024 and marked the first time in three years that the economy contracted. Imports expanded 37.9%, the fastest since 2020, and pushed GDP down by nearly 4.7 percentage points. Consumer spending also slowed sharply. And federal government spending fell at a 4.6% annual pace, the biggest drop since 1986.
Thursday’s report was the Commerce Department’s third and final report on first-quarter growth. The first look at April-June GDP growth is due July 30.
(Subham Singh)
