Real gross domestic product (GDP) decreased at an annual rate of 0.5% in the first quarter of 2025, according to the third 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 and consumer spending. Real GDP was revised down 0.3 percentage point from the second estimate, reflecting downward revisions to consumer spending and exports that was partly offset by a downward revision to imports.
Personal consumption added 0.31 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 (0.30 pp) such as those in household consumption expenditure: healthcare (0.35 pp), housing and utilities (0.35 pp), and other services (0.18 pp). Goods added (0.01 pp) to real GDP, with durable goods subtracting (-0.28 pp) driven by motor vehicles and parts subtracting (-0.30 pp). Nondurable goods added (0.29 pp) with food & beverages purchased for off-premises consumption (0.05 pp) and clothing and footwear (0.12 pp).
Business investment added 3.90 pp to real GDP. Non-residential fixed investment added 1.36 pp, with structures subtracting 0.07 pp. Equipment and transportation equipment added 1.11 pp and 0.8 pp, respectively. Information processing equipment added 1.01 pp, and other equipment subtracted 0.02 pp. Residential fixed investment subtracted 0.05 pp.
Government spending subtracted 0.10 pp to real GDP. The Federal government subtracted 0.31 pp to real GDP while state and local added 0.21 pp.
Net exports had a significant effect on real GDP, subtracting 4.61 pp to growth. Exports added 0.04 pp after subtracting 0.01 pp in the fourth quarter of 2024, while imports subtracted 4.66 pp to real GDP after adding 0.27 in the fourth quarter of 2024.
Read the BEA release.
