US economy shrinks 0.3% on higher imports

The US economy contracted unexpectedly in the first quarter, as Trump policy uncertainty weighed on businesses.

Gross domestic product decreased at a 0.3% annualized rate last quarter, compared to a 2.4% growth in Q4 2024, according to official data released on Wednesday.

This came against the expectations of Dow Jones analysts for a 0.4% annualized growth in the US economy in the first quarter.

The contraction was attributed to increased imports, lower government spending, and slower consumer spending, offset by increased private domestic investment and exports, according to the Bureau of Economic Analysis.

The personal consumption expenditures price index rose to 3.6% in the first quarter, compared to 2.4% in Q4 2024.

The core index, which excludes food and energy prices, increased by 3.5%, up from 2.6% in the previous quarter.