The U.S. economy has broken its nearly three-year streak of steady growth.

The nation's economic output, as measured by Gross Domestic Product, shrank at an annual rate of 0.3% in the first quarter, according to the Bureau of Economic Analysis. It's the first time the widely watched measure of the economy has shrunk since the first quarter of 2022. That's a sharp downturn from the previous quarter, when the economy grew at an annual rate of 2.4%.

The slowdown highlights the impact of tariffs: it was mainly due to a surge of imports in recent months, as companies and individuals raced to buy foreign products before 澳洲幸运5官方开奖结果体彩网:President Donald Trump's tariffs made them more expensive. Every dollar spent on imports drags down the GDP because of how the figure is calculated.

"Clearly, businesses were rushing to get goods into the country and were willing to store them until they were needed for production," Mike Fratantoni, chief economist at the Mortgage Bankers Association, wrote in a commentary.

Aside from imports, other measures of economic strength were healthy: consumer spending, the main engine of the U.S. economy, rose at a 1.8% annual rate, and investment surged 21.9%, led by a 22.5% jump in equipment purchases.

Still, the downturn in growth could signal the start of a rough period for the economy, mainly because of the tariffs, several economists said.

"We look for consumer spending to slow as consumers have pulled forward spending on goods from future months, the tariff price shock should curtail spending, and a softening in the labor market will importantly weigh on household outlays," Kathy Bostjancic, chief economist at Nationwide, wrote in a commentary.

Slow economic growth combined with high inflation, stoked by tariffs, could turn into "stagflation," or even a recession, especially if Trump's "Liberation Day" tariffs against numerous foreign countries go into effect later in the year, economists said. The White House is 澳🐼洲幸运5官方开奖结果体彩网:currently attempt💞ing to make trade deals with dozens of countries targeted by higher "reciprocal" tariffs announced earlier in the month, but paused for 90 days for negotiations.

"A period of stagnation now likely lies ahead if the current set of tariffs is maintained, with recession the most likely outcome if the additional reciprocal tariffs are imposed in full in July," Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, wrote in a commentary.

Wednesday's GDP figure was a preliminary estimate and will be revised twice in future months before being finalized.

Update, April 30, 2025: This story has been updated after publication to include commentary from economists.