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

WASHINGTON AP The U S economic system shrank at a annual pace from January through March as President Donald Trump s commerce wars disrupted business the Commerce Department stated Thursday in a downgrade from its previous estimate First-quarter rise 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 sector 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 cabinet spending fell at a annual pace the biggest drop since Transaction 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 analysis as consumer spending or business commitment 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 increase to bounce back to in the second quarter according to a survey of forecasters by the records firm FactSet Thursday s analysis was the Commerce Department s third and final overview on first-quarter advancement The first look at April-June GDP upsurge is due July