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Story perspectives

U.S. Economy Contracts 0.5% Amid Sluggish Consumer Spending

6/26/2025

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Summary

Story summary

The U.S. economy shrank by 0.5% in Q1 2025, exceeding earlier estimates of a 0.2% decline.
A significant rise in imports (up 37.9%) and reduced government spending contributed to the contraction.
Consumer spending increased at the slowest rate since the pandemic, particularly affecting recreation services.
Economists anticipate a recovery in Q2 growth, despite ongoing tariff uncertainties impacting confidence.

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Story summary

The U.S. economy shrank by 0.5% in Q1 2025, exceeding earlier estimates of a 0.2% decline.
A significant rise in imports (up 37.9%) and reduced government spending contributed to the contraction.
Consumer spending increased at the slowest rate since the pandemic, particularly affecting recreation services.
Economists anticipate a recovery in Q2 growth, despite ongoing tariff uncertainties impacting confidence.