Real gross domestic product (GDP) decreased at an annual rate of 0.2% in the first quarter of 2025, according to the second estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4%.
The decrease in real GDP in the first quarter primarily reflected an increase in imports, which are a subtraction in the calculation of GDP, and a decrease in government spending. These movements were partly offset by increases in investment, consumer spending, and exports. Real GDP was revised up 0.1 percentage point from the advance estimate, reflecting an upward revision to investment that was partly offset by a downward revision to consumer spending
Personal consumption added 0.80 percentage points (pp) to growth, following a 2.70 pp addition in the fourth quarter of 2024. The increase in PCE was driven by services (0.79 pp) such as those in household consumption expenditure: healthcare (0.37 pp), housing and utilities (0.37 pp), and other services (0.30 pp). Goods added (0.02 pp) to real GDP, with durable goods subtracting (-0.29 pp) driven by motor vehicles and parts subtracting (-0.30 pp). Nondurable goods added (0.30 pp) with food & beverages purchased for off-premises consumption (0.05 pp) and clothing and footwear (0.12 pp).
Business investment added 3.98 pp to real GDP. Non-residential fixed investment added 1.36 pp, with structures subtracting 0.04 pp. Equipment and transportation equipment added 1.16 pp and 0.12 pp, respectively. Information processing equipment added 1.01 pp, and other equipment subtracted 0.02 pp. Residential fixed investment subtracted 0.02 pp.
Government spending subtracted 0.12 pp to real GDP. The Federal government subtracted 0.30 pp to real GDP while state and local added 0.18 pp.
Net exports had a significant effect on real GDP, subtracting 4.90 pp to growth. Exports added 0.26 pp after subtracting 0.01 pp in the fourth quarter, while imports subtracted 5.16 pp to real GDP after added 0.27 in the fourth quarter.
Read the BEA release.
