The US economy shrunk by 0.3% in the first quarter of 2025, according to the US Department of Commerce. This is worse than the 0.8% growth predicted by analysts. The news follows a 2.4% growth in the previous quarter.
Economic Growth Takes a Hit
The latest figures make the first quarter of 2025 the worst for the US economy since the first quarter of 2022. Economists had warned that Donald Trump’s trade policies could lead to higher inflation and even recession. Trump’s tariffs have increased trade tensions with China, making Americans uneasy.
Despite this, Trump blamed Joe Biden for the weak economic data. “Our country will boom, but we have to get rid of what Biden left behind,” he said on Truth Social. He added that the economy just needs time to recover.
Trade Deficit Takes Center Stage
Analysts say the US economic contraction was largely driven by a growing trade deficit. US imports surged to 41.3% in the first quarter, while exports rose just 1.8%. When imports outpace exports, it hurts GDP growth.
Peter Navarro, Trump’s top trade advisor, remains optimistic. “This is the best negative number I’ve ever seen,” he said, pointing to increased domestic investment. However, the Commerce Department attributes this to businesses stockpiling goods before Trump’s tariffs took effect.
The source of this information is CNN.