Key Events

U.S. economic growth collapsed at the start of the year, a reversal from a healthy expansion at the end of 2024, as businesses and consumers grappled with uncertainty over federal policies.

Inflation-adjusted gross domestic product declined at an annual rate of 0.3% over the three months ended in March, according to the first estimate by the Bureau of Economic Analysis, released Wednesday. The consensus call among economists surveyed by FactSet was for growth of 0.8% in the first quarter. The Bloomberg consensus was a bit closer, estimating a decline of 0.2% as of Wednesday morning.

The agency said Wednesday that the first quarter’s contraction was primarily driven by an enormous increase in imports, which creates a drag on GDP growth. Government spending was also down.

Wednesday’s contraction compares with real GDP growth of 2.4% during the fourth quarter of last year and 2.8% for 2024 as a whole.