The US economy contracted for the first time in three years to start 2025 as a surge in imports dragged down GDP and prices increased more than forecast.  The Bureau of Economic Analysis' advance estimate of first quarter US gross domestic product (GDP) showed economic growth contracted at an annualized rate of 0.

The US famously bounced back from a pandemic recession that struck like a hammer blow in 2020. Fueled by a massive government rescue effort that pumped tremendous amounts of money into the economy, the nation was soon outpacing rivals in a return to growth.

The first quarter decrease follows the U.S. economy growing by 2.4% in the fourth quarter of 2024, after increasing 3.1% in the third quarter, according to the BEA. The Federal Reserve Bank of Atlanta’s GDPNow, a running estimate of real GDP growth based on available economic data, projected a -2.7% GDP growth rate in the first quarter of 2025.