Q1 GDP report presents first contraction since 2022

The Bureau of Economic Analysis released the first quarter 2025 gross domestic product (GDP) report Wednesday, which showed an annual rate decrease of 0.3%.

"Real GDP fell slightly in the first quarter as consumer spending moderated. Meanwhile, imports increased 41% as businesses stocked up on inventory ahead of tariff increases,” said America’s Credit Unions’ Chief Economist Curt Long. “Consumption still grew, albeit at a slower rate than previously, and business investment rebounded from a poor fourth quarter. More troublingly, inflation accelerated, which combined with tariffs pushes the prospect for rate cuts further into the future. As always, credit unions are a trusted financial partner helping their members plan for the future in uncertain times."

The decrease in real GDP in the first quarter reflects an increase in imports, as this is measured as a subtraction in the calculation of GDP, and a decrease in federal spending. These movements were partially offset by increases in investment, consumer spending, and exports.