U.S. economy shrank 0.5% between January and March, worse than earlier estimates revealed

WASHINGTON AP The U S business activity shrank at a annual pace from January through March as President Donald Trump s business wars disrupted business the Commerce Department informed Thursday in a downgrade from its previous estimate First-quarter development sank under a surge of imports as companies in the United States rushed to bring in foreign goods before Trump could impose tariffs on them The Commerce Department previously estimated that the business activity fell in the first quarter The January-March drop in gross domestic product the nation s output of goods and services reversed a increase in the last three months of and marked the first time in three years that the economic system contracted Imports expanded fastest since and pushed GDP down by nearly percentage points Consumer spending also slowed sharply And federal establishment spending fell at a annual pace the biggest drop since Bargain deficits reduce GDP But that s just a matter of mathematics GDP is supposed to count only what s produced domestically not stuff that comes in from abroad So imports which show up in the GDP assessment as consumer spending or business resources have to be subtracted out to keep them from artificially inflating domestic production The first-quarter import influx likely won t be repeated in the April-June quarter and therefore shouldn t weigh on GDP In fact economists expect second-quarter development to bounce back to in the second quarter according to a survey of forecasters by the figures firm FactSet Thursday s analysis was the Commerce Department s third and final statement on first-quarter upsurge The first look at April-June GDP expansion is due July