Story perspectives

U.S. Economy Contracts Amidst Low Spending and Tariffs

5/30/2025

29 5

Summary

Story summary

The U.S. economy shrank by 0.2% in Q1 2023, its first decline since 2022, driven by tariffs and low consumer spending.
Consumer spending increased by just 1.2%, the slowest growth in nearly two years, impacted by reduced demand for vehicles and services.
Imports rose by 42.6%, as businesses sought to circumvent tariffs, leading to a record trade deficit.
Corporate profits decreased by 2.9%, the steepest drop since 2020, raising concerns about future inflation.
The Federal Reserve remains cautious due to high inflation and potential labor market challenges.

1 of 1

Story summary

The U.S. economy shrank by 0.2% in Q1 2023, its first decline since 2022, driven by tariffs and low consumer spending.
Consumer spending increased by just 1.2%, the slowest growth in nearly two years, impacted by reduced demand for vehicles and services.
Imports rose by 42.6%, as businesses sought to circumvent tariffs, leading to a record trade deficit.
Corporate profits decreased by 2.9%, the steepest drop since 2020, raising concerns about future inflation.
The Federal Reserve remains cautious due to high inflation and potential labor market challenges.