In the first quarter of 2025, the US economy contracted by 0.3%, according to experts.

During the first months of President Donald Trump's second term, the U.S. economy contracted due to a series of tariff proposals that generated uncertainty among consumers and businesses.

During the three months ending in March, US GDP experienced an annualized contraction of 0,3%. This represents a significant decline compared to the 2,4% annualized growth recorded in the last quarter of 2024.

Experts claim that the main factor behind this GDP decline was the increase in imports, as companies had to stockpile products in their warehouses to counter the high-impact tariff measures promoted by Donald Trump. Before the data was released, analysts explained that such a drop did not indicate a weakening economy. The report showed lower figures than many economists had anticipated.

The government's GDP equation reduces imports with the goal of eliminating international production from the count of total goods and services. Earlier this year, imports increased by more than 40% as U.S. businesses rushed to stock up on inventory in anticipation of new tariffs, records show. In contrast, government spending fell by approximately 5% in the first three months of 2025.

The GDP decline "primarily reflected an increase in imports," according to the U.S. Department of Commerce. The data extends to a period preceding the implementation of the notorious Liberation Day customs duties in early April.

Experts largely anticipated a significant decline in economic activity at the beginning of this year, although they disagreed on the magnitude of the contraction. "We anticipate a marked slowdown in the U.S. economy during the first quarter, driven by growing political uncertainty surrounding trade, tariffs, and immigration," S&P Global Ratings said in a statement to clients.

The data is likely to be influenced by an increase in imports as companies try to avoid import taxes, S&P Global Ratings said. The GDP formula subtracts imports to exclude goods and services produced outside the country, so a temporary increase in imports could obscure the result.

"The first-quarter GDP reading may not provide an accurate reflection of underlying economic conditions because it is significantly influenced by the anticipated concentration of imports," they added.

Various analysts characterize a recession as a consecutive decline in real GDP over two quarters. However, the National Bureau of Economic Research, the agency responsible for formalizing the recognition of a recession, uses a more complex definition based on several economic indicators.

Despite fragile consumer confidence and constant market fluctuations, certain key economic indicators remain relatively robust.

The unemployment rate is at a historically low level, and hiring growth remains strong, although it has slowed from its previous peaks. Meanwhile, inflation fell in March, placing cost increases significantly below their peak in 2022, according to statistics.

Some economists told ABC News that hard data provides, in the best-case scenario, limited relief. Economic indicators, such as inflation and employment, are released a month after data collection and often reflect gradual adjustments in business or consumer behavior, analysts explained. Therefore, these indicators can become irrelevant, especially in a constantly changing economic environment.

In a talk at the Economic Club of Chicago earlier this month, Federal Reserve Chairman Jerome Powell said the U.S. economy is in solid shape, but also warned of signs of a possible slowdown. "Life moves pretty fast," Powell clarified.