Economy shrank 0.2% in the first quarter, updated GDP shows, as trade wars sapped U.S. growth

The contraction in the economy in the first three months of 2025 was slightly smaller than originally reported, a government update showed, but the underlying message was the same: Ongoing trade disputes are hampering U.S. growth.

Gross domestic product fell at an annual rate of 0.2% in the first quarter instead of 0.3% as originally reported, the Bureau of Economic Analysis said Thursday. GDP is the official scorecard of the economy.

The economy officially shrank for the first time in three years because of a surge in imports that pushed the trade deficit to record highs. Trade deficits subtract from GDP.

Slower consumer spending was another factor.