U.S. real gross domestic product (GDP) decreased at an annual rate of 0.3% in the first quarter of 2025, reversing from a 2.4% increase in the fourth quarter of 2024. The decline was driven primarily by higher imports and reduced government spending, despite gains in consumer spending, investment, and exports, according to the U.S. Bureau of Economic Analysis.
Real final sales to private domestic purchasers rose 3.0% in the first quarter, up slightly from a 2.9% increase in the previous quarter. This category, which includes consumer spending and private investment, indicates continued domestic demand strength despite the overall GDP contraction.
The price index for gross domestic purchases rose 3.4%, up from 2.2% in the fourth quarter. The personal consumption expenditures (PCE) price index increased 3.6%, compared with 2.4% previously. When excluding food and energy, the PCE price index rose 3.5%, following a 2.6% increase in the prior quarter.
Current-dollar GDP, which includes the effects of inflation, increased 3.5% in the first quarter.
