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The US economy shrank more than previously estimated in the first three months of 2025, according to government data. According to data released by the US Commerce Department on Thursday, gross domestic product (GDP) fell by 0.5 percent at an annual rate in the first quarter.
Earlier, a 0.2 percent decline was expected, but the latest data revised that down to show that the contraction was deeper. The US economy grew by 2.4 percent in the last quarter of last year.
The main reasons behind the GDP decline are weaker than expected consumption spending and exports. In addition, imports have surged due to sweeping tariffs imposed since President Donald Trump's re-election. The impact was seen as traders imported and stockpiled large quantities of materials before the new tax on imports from trading partners came into effect.
Imports are counted negatively in the calculation of GDP, due to which the decline in government expenditure and weakness in consumption has been observed in the overall economy. According to the Department of Commerce, the latest revised estimates show a decline in consumption spending and exports, although the decline in imports has somewhat mitigated the impact.
Currently, the US administration has announced a 10 percent customs tax on goods coming from most of its trading partners, which has not yet reached the implementation stage. But since the decision is likely to be implemented in July, uncertainty has increased in the market.
President Trump has also imposed high taxes on steel, aluminum and vehicle imports. According to economists, such steps have brought instability to the market, disruptions in the supply system and a decline in the morale of consumers.
For the time being, policy makers are closely analyzing the economic data throughout the summer, so it is expected that it will have an impact on the upcoming policy.
