The US economy shrank 0.3% in first three months of the year as firms stockpiled imports ahead of Trump tariffs
The new data focuses on a period before US President Donald Trump's most far-reaching tariffs were announced
Meanwhile, President Trump will host CEOs from major companies including Nvidia and GE Aerospace
Later today, Trump will also hold a Cabinet meeting with his leadership team
Edited by Brandon Livesay in New York
Bernd Debusmann Jr
Reporting from the White House
Just a few moments ago, we heard from Donald Trump's trade advisor Pete Navarro – who walked up to a group of journalists with the words "what's up, team?" after doing a live TV hit.
In brief remarks before he entered the West Wing, Navarro said that, in the administration's views, data showing that the US economy shrank in the first quarter "should be positive news" that has been skewed by an uptick in imports.
"What happened with the numbers today is that we had a fairly extraordinary surge of imports, driven by the rest of the world trying to get their products in here before the tariffs," he says.
"Next time, that won't be the case at all, and it will reverse," he says.
Additionally, Navarro pointed to a 22% increase in domestic investment – which he described as "literally off the charts" as a positive sign.
Asked about Trump's earlier Truth Social post asking people to patient, Navarro says that Trump "inherited a tremendously bad set of economic policies" from the Biden administration.
"The fruit of the that poison by the tree is a series of spending bills that had drawn debt over a fiscal cliff."
Navarro was also asked about potential trade deals with China and India, but declined to give specifics.
"Deals are coming," he said as he walked away. "Just be patient."
Ken Kim, a senior economist at accounting firm KPMG, says today's GDP report indicates "pre-emptive behaviour by both consumers and businesses, acting before the tariffs were announced in early April".
Speaking to the the BBC's Business Today programme, Kim says that with the exception of the Covid-19 pandemic, the surge in US imports was "the highest since the early 1970s".
"The reason for that was businesses wanted to bring the goods in ahead of time before the tariffs hit prices," he says.
Kim says the expectation is that the US will be hit by price shocks because of the tariffs, and inflation "is likely to go higher over the coming months".
He adds that the Fed is not expected to cut interest rates until the fourth quarter of this year.
"Going forward, we think the inflationary shock that will hit both consumers and businesses will dampen consumer spending as well as curtail capital spending by businesses," Kim says, adding that this will "weaken growth for the remainder of this year".
As we've been reporting, the US economy shrank in the first three months of 2025, according to the latest figures released by the US Bureau of Economic Analysis.
This was driven by a drop in government spending and a surge in imports – which count against growth – as firms raced to get good into the country ahead of tariffs.
Today's report is the most comprehensive reading of how the world's largest economy is holding up following the introduction of import taxes by President Donald Trump, which have scrambled global trade and created major uncertainty.
But analysts say it will take more time to understand the impact of those changes and the surge in imports is expected to be reversed in the months ahead.
The data shows business investment increased unexpectedly, while consumer spending – the primary driver of the US economy – also expanded, though at a slower pace than in 2024.
"Overall, not as bad as feared," said Paul Ashworth, chief North America economist at Capital Economics.
New York congressman Ritchie Torres has taken to social media to criticise the White House over the latest news that America's gross domestic product (GDP) has dropped this quarter.
"It’s official: Donald Trump has finally liberated the American economy—from growth. GDP shrank by 0.3%," he said on X.
"Making Recessions Great Again."
The bell has sounded and trading on Wall Street has just opened for the day.
All three main indexes have opened down:
US President Donald Trump has shared his thoughts on the economy after GDP figures were announced this morning, which indicates the US economy shrank 0.3% in first three months of this year.
On Truth Social, Trump claims: "this is Biden’s Stock Market, not Trump’s".
"I didn’t take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers," he says in a post on his Truth Social account.
"Our Country will boom, but we have to get rid of the Biden “Overhang.” This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!"
Michael Race
Business reporter
The surge in companies rushing to bring in more goods from overseas ahead of import taxes kicking in has been the main driver behind the US economy contracting.
However, some economists are suggesting the downturn could prove to be a one-off.
While the first three months of the year saw imports rise some 41.3%, "the surge now appears to be going into reverse," according to Paul Ashworth, chief North America economist at Capital Economics.
That makes sense given a lot of firms shipped in the goods they wanted before the tariffs – and might be now looking for alternative and/or American-based suppliers, which is what Trump wants in order to boost American manufacturing.
Ashworth predicts imports falling going forward will likely lead to the economy bouncing back in the next few months.Bernd Debusmann Jr
Reporting from the White House
Last night – to mark Trump's 100 days in office celebrations – the Trump administration proudly put out a statement touting its economic achievements, including investments from some of the firms whose CEOs are in town for the president's event later today.
The statement boasted of over $5tn (£3.74tr) in investments, which it claims will create over 450,000 new jobs and usher in an age of "American prosperity".
Among the current and planned investments listed are $500bn from Japan-based SoftBank and US-based OpenAI and Oracle, another $500bn from Apple in US manufacturing and training, $500m from Nvidia for US-based AI infrastructure.
Additionally, the White House statements pointed to foreign investments pledged by foreign governments, including $1.4tn from the UAE, $1tn from Japan and $600bn from Saudi Arabia.
Today, US President Donald Trump has a Cabinet meeting at 11:00 EST (16:00 BST), a White House "investing in America" event at 16:00, and will phone-in for a televised town hall at 20:00.
He's been on a media blitz to mark his first 100 days in office, which was yesterday.
We'll be following his day closely to see if he addresses today's GDP figures.
Dharshini David
Deputy economics editor
Not 24 hours after the White House Press Secretary claimed that the American economy was going great guns, there's dramatic proof that it wasn’t – even ahead of so-called Liberation Day.
This is a worse outcome for growth than economists expected. Some of the first quarter’s weakness was due to a surge in imports, as retailers stockpiled ahead of tariffs coming in – and that counts as depressing GDP growth.
But, with consumer spending weak, there are clear signs that the damage to growth may be sustained.
Influential economists had previously warned that the risk of the US economy falling into recession this year was close to 50%.
Many will be hastily readjusting those expectations, fearing that the pain for households and businesses has come sooner and will be more acute.
And don’t forget, Americans account for $1 in $6 of global consumer spending – if they’re not buying, it's harder for other countries to sell. We’re not immune to their pain
Natalie Sherman
New York business reporter
We just got our first comprehensive read of how the US economy was doing at the start of the year.
The US economy shrunk at an annual rate of 0.3% in the first three months of the year, the Commerce Department says.
That marked a sharp downturn after growth at an annual pace of 2.4% in the previous quarter, though the fall was not as severe as some analysts had predicted.
The decline was driven by drop in government spending and a more than 40% surge in imports – which count against growth – as companies raced to get ahead of the tariffs.
Consumer spending growth also slowed from the end of last year, with growth of 1.8%, down from 4% in the prior quarter.
Treasury Secretary Scott Bessent just yesterday urged people to focus less on sentiment and more on the hard data as they try to evaluate how the economy is doing.
This report, which focuses on a period before US President Donald Trump’s most far-reaching tariffs were announced, is unlikely to settle the debate.
We have the initial data from the US Bureau of Economic Analysis. It indicates the US gross domestic product (GDP) decreased at an annual rate of 0.3 percent in the first quarter of 2025.
Multiple CEOs will visit the White House on Wednesday for Trump’s "invest in America" event, according to a White House spokesperson.
Some of the notable companies include:
During a press briefing yesterday, the White House boasted having more than $5tn (£3.7tn) of investments in the US since Trump has entered office.
The Trump administration is looking to boost the president’s economic gains amid polling that suggests a majority of Americans are displeased with some of his aggressive economic policies.
His announcement of a sweeping tariff rollout has sent the stock markets tumbling and impacted the value of the US dollar. It has also impacted some relationships with key trading partners.
Brandon Livesay
Reporting from New York
Hello and welcome to our live coverage of US politics, where the economy is set to be the major talking point of the day.
We're about to get data from a key economic report on the US gross domestic product.
Then later today, US President Donald Trump will meet with CEOs from major companies for an investment event.
There's plenty more happening today in the world of US politics, so stick with us.
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