Economy shrinks for the first time since early 2022

Here are things we’d like to see shrink: that one T-shirt we secretly hate but don’t have the heart to get rid of, the line for the bathroom at concerts, and the number of ads on YouTube videos.

One thing we definitely didn’t want to see shrink? The economy, obviously. And yet.

US gross domestic product declined at a 0.3% annual rate in the first three months of the year, according to the Bureau of Economic Analysis. That’s a stark change from the end of last year, when the economy grew at an annual rate of 2.4%. The latest reading marks the first quarterly decline since Q1 2022.

Looking past the headline data, the decline in GDP “primarily reflected an increase in imports” as well as a “decrease in government spending,” the Bureau said.

While President Donald Trump was quick to place blame on predecessor Joe Biden—who, in fact, left Trump with a growing economy that was the “envy of the world”—the data lays bare the impact of Trump’s tariffs.

Consumers and businesses rushed to buy foreign products before tariffs raised prices. While the US has maintained a wide trade deficit in recent years, the tariff-motivated surge in imports was strong enough to impact GDP performance, according to NBC News.

Outside the import-related figures, other measures of the economy looked fairly solid—but don’t expect it to stay that way, economists warn.

“All of this is going to change,” Kathy Bostjancic, chief economist for Nationwide, told the New York Times. “Once everything kicks in, we’ll have a slower economy, the labor market slowing. Hiring has already stalled, and we expect the unemployment rate to start to rise.”