Economic output declined in the first quarter
Economic output fell at an annual rate of 0.3% in the first three months of 2025, the U.S. Bureau of Economic Analysis said Wednesday. That follows a 2.4% increase in the last quarter of 2024. The fall in gross domestic product, which accounts for the value of goods and services produced in the U.S., can be attributed to increased imports and a drop in government spending. Also, while consumer spending rose, it did so at a slower pace than in the prior quarter.
The rise in imports is due to U.S. businesses stocking up on goods ahead of the federal government’s tariffs, according to The Wall Street Journal. Exports barely increased, while imports were up about 5%, the BEA said.
On the positive side, exports and investment were up in the first quarter, the BEA said.
The agency noted that the Los Angeles wildfires occurred in January, within the first quarter, but said it isn’t possible to estimate their role, if any, in the 0.3% decline. That’s because the destruction of buildings like homes and commercial structures doesn’t directly affect gross domestic product.
Consumer expectations hit 13-year low
Consumers’ assessment of income, business and job market conditions was bleak in April, according to survey results that The Conference Board, a nonprofit business group, released Tuesday. The group’s consumer confidence index fell nearly 8% to its worst showing in 13 years.
“Expectations about future income prospects turned clearly negative for the first time in five years, suggesting that concerns about the economy have now spread to consumers worrying about their own personal situations,” Stephanie Guichard, a Conference Board senior economist, said in a statement.
The decline in confidence was most pronounced for consumers aged 35 to 55 and those whose families make more than $125,000 a year. Respondents to the survey said they were concerned about tariffs and inflation, although some noted that prices for gas and some foods have fallen recently.