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 commerce wars disrupted business the Commerce Department broadcasted Thursday in a downgrade from its previous estimate First-quarter progress 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 economic system 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 financial market contracted Imports expanded fastest since and pushed GDP down by nearly percentage points Consumer spending also slowed sharply And federal regime spending fell at a annual pace the biggest drop since Pact 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 statement as consumer spending or business assets 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 enhancement to bounce back to in the second quarter according to a survey of forecasters by the input firm FactSet Thursday s record was the Commerce Department s third and final description on first-quarter advancement The first look at April-June GDP advancement is due July