The US economy shrunk in the first quarter of 2025, fueling fears of recession at the beginning of the President’s second term Donald Trumpwhich wage a potentially expensive trade war, according to CNBC.

In particular, US GDP decreased at a rate of 0.3% on an annual basis, according to a report by the Ministry of Commerce Wednesday.

Economists who participated in a Dow Jones survey expected an increase of 0.4% after GDP growth by 2.4% in the fourth quarter of 2024. However, in recent days some Wall Street economists have changed their predictions in a negative picture, mainly due to the unexpected increase in imports as their consumer increases and consumer increases. duties Trump implemented in early April.

Indeed, imports increased by 41.3% in the quarter, due to the increase in goods by 50.9%. Imports are removed from GDP, so growth shrinking cannot be considered so negative, as the voltage can be reversed in the next quarters. Exports increased by 1.8%.

“Perhaps some of this negativity is due to the rush to imports before increasing duties, but there is just no way for analysts to describe this. Growth has just disappeared, “said Chris Rupkey, a FWDBonds chief economist.

Consumer spending slowed during the period, but remained positive. Personal consumer spending increased by 1.8% for the period, in the shortest quarterly increase from the second quarter of 2023 and lower than the increase of 4% in the previous quarter.

In addition, private domestic investments jumped during the period, up 21.9%, mainly due to the increase in equipment costs by 22.5%, which could also be due to duties.

“It is not surprising that GDP suffered a blow in the first trimester, mainly because the trade balance was launched as companies imported goods crazy to avoid duties. The most revealing number was consumer costs, which increased, but at a relatively weak pace, “said Robert Frick, a corporate economist at Navy Federal Credit Union.