The US Bureau of Economic Analysis (BEA) has released its advance estimate for the first quarter of 2025, revealing a decrease in real gross domestic product (GDP) at an annual rate of 0.3 percent. This marks a reversal from the 2.4 percent increase seen in the fourth quarter of 2024.
The decline primarily reflects an increase in imports and a decrease in government spending, which were partly offset by increases in investment, consumer spending, and exports. Imports rose due to an uptick in imported goods, particularly consumer goods and capital goods. In contrast, consumer spending grew at a slower pace, while government spending decreased.
Investment increased mainly through private inventory investments, with wholesale trade being the largest contributor. Consumer spending also rose, driven by increases in services and goods, including healthcare, housing, and utilities.
However, the impact of the California wildfires on first-quarter 2025 estimates is not quantifiable due to the way BEA accounts for disaster losses. The disasters resulted in estimated losses of $34 billion in privately owned fixed assets and $11 billion in state and local government-owned fixed assets.
The decrease in GDP and related measures indicates a slowdown in economic activity, which may be attributed to various factors, including global trade tensions and changes in government policies.
Source: https://www.bea.gov/news/2025/gross-domestic-product-1st-quarter-2025-advance-estimate