Fact Check: US economy shrank 0.5% in Q1 2025, marking first contraction in three years.

Fact Check: "US economy shrank 0.5% in Q1 2025, marking first contraction in three years."

What We Know

The claim that the U.S. economy shrank by 0.5% in the first quarter of 2025 is supported by multiple sources. According to a report from CBS News, the U.S. gross domestic product (GDP) experienced a contraction at an annual rate of 0.5% from January to March 2025, marking the first decline in three years. This figure was confirmed in the Commerce Department's third and final GDP report for that period.

Further corroboration comes from Reuters, which noted that the contraction was influenced by a surge in imports as businesses rushed to stock up on goods before the implementation of tariffs. This influx of imports negatively impacted GDP calculations, as it indicated a shift away from domestic consumption.

Additionally, Fox Business reported the same contraction rate of 0.5%, emphasizing that this was a significant economic event given the previous three years of growth.

Analysis

The evidence supporting the claim is robust, with multiple reputable news outlets and government reports confirming the GDP contraction. The Commerce Department's report, which is the authoritative source for economic data, provides a reliable basis for this information. The revision of the GDP figure from an initial estimate of a 0.3% decline to a final figure of 0.5% indicates a thorough review process, which adds credibility to the data presented.

However, it is important to note the context of this contraction. Experts cited in the reports, such as Greg Daco from EY-Parthenon, highlighted that while the GDP fell, other indicators, such as "real final sales to private domestic purchasers," showed growth at a rate of 1.9% during the same period. This suggests that underlying economic conditions may not be as dire as the contraction implies, indicating a complex economic landscape rather than a straightforward decline (CBS News, Reuters).

The sources used are credible, with CBS News and Reuters being well-established news organizations known for their journalistic standards. The Commerce Department is the official source for economic data, further validating the information.

Conclusion

Verdict: True
The claim that the U.S. economy shrank by 0.5% in the first quarter of 2025 is accurate, as confirmed by multiple reliable sources, including the Commerce Department's final GDP report. The contraction marks the first decline in three years, although it is essential to consider the broader economic context, which includes other indicators of economic activity that suggest resilience in certain areas.

Fact Check: US economy shrank 0.5% in Q1 2025, marking first contraction in three years.